96# Keltner Channel Histogram with I-Trend ADX MT5

Submit by Janus Trader 2024

This trading strategy leverages the Keltner Channel Histogram as a trend identification tool and the ITrend ADX indicator for trend confirmation. The objective is to identify high-probability trade setups based on synchronized signals from these two indicators.

Indicators and Parameters

1. Keltner Channel Histogram

   • Purpose: Identifies the strength and direction of the trend.

   • Key Parameter Adjustments:

     • Smoothing Period: Reduced from 20 to 5.

   • Buy Signal: Histogram > 50, colored in dodger blue.

   • Sell Signal: Histogram < -50, colored in dodger blue.

2. ITrend ADX

   • Purpose: Confirms the trend with visual Buy and Sell Arrows.

   • Default settings are used.

3. Levels for Keltner Channel Histogram

   • Buy Level: +50

   • Sell Level: -50

Trading Rules

Buy Signal

1. Keltner Channel Histogram:

   • Value > 50.

   • Histogram bar is colored in dodger blue.

2. ITrend ADX:

   • Buy arrow appears.

   Conditions:

   • The Keltner Histogram and ITrend ADX signals do not need to occur simultaneously but should align within a reasonable period to confirm a valid signal.

Sell Signal

1. Keltner Channel Histogram:

   • Value < -50.

   • Histogram bar is colored in dodger blue.

2. ITrend ADX:

   • Sell arrow appears.

   Conditions:

   • As with the Buy Signal, synchronization is not required, but signals must align for confirmation.

Stop Loss and Profit Target

1. Stop Loss:

   • Place at the previous swing high (for short trades) or previous swing low (for long trades).

2. Profit Target:

   • Target a risk-to-reward ratio between 1:1.1 and 1:1.5.

   • Adjust based on market volatility and pair characteristics.

Time Frame and Assets

• Time Frame: 5 minutes or higher. For 5 min time frame only Berlin session.

• Currency Pairs: Suitable for all currency pairs, with the potential for application to other instruments (e.g., commodities or indices) after testing.

Implementation Notes

1. Signal Filtering:

   • Ensure no counter-signals are present in the indicators.

   • Avoid trades during low liquidity periods, such as the final hours of a trading session.

2. Risk Management:

   • Use a position size calculator to maintain consistent risk across trades, aiming for 1%-2% of account equity per trade.

3. Backtesting:

   • Perform extensive backtesting over at least six months of historical data for each asset and time frame to verify strategy performance.

4. Live Testing:

   • Use the strategy in a demo account to ensure robust real-time application before scaling to a live account.

By combining the Keltner Channel Histogram with the ITrend ADX indicator, this strategy seeks to identify trending markets with high accuracy while maintaining a disciplined approach to risk management.

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