Igann Strategy - Basic PrinciplesTuesday, 7 November 2017 01:00
Igann Strategy is a trading method for the Forex market, which is widely used by traders around the world. In practice, this approach shows high profits, and also demonstrates stable results for a long time.
The developers of such a strategy note that it’s not used to receive super profits. The main advantage of this technique is the possibility of stable work with an acceptable profit. First of all, advantages of Igann will be appreciated by traders who can estimate their strengths, and don’t consider Forex as a source of instant wealth.
Fundamentals of Igann Strategy
This technique belongs to the class of indicator strategies. The system is based on several technical tools:
- Ichimoku Kinko Hyo.
- Gann Hilo - an updated version of the indicator, the indications of which are displayed in the form of a histogram.
- RSI + CCI. You can use both instruments separately, or you can install the combined GG-RSI-CCI1 tool. This program will display data of both indicators in the same window.
To follow the strategy correctly, it’s worth considering each of these indicators in more detail.
- Working with the Ichimoku indicator, you only need one of the lines, which is Kijun-sen. The remaining lines may interfere with visual perception, so we recommend changing their color in the settings window, setting it to the background color.
- Gann Hilo Histo is a histogram with columns of different colors. The color of the bars depends on the position of the price relative to the indicator line. The upward trend corresponds to the blue color, and the downtrend is marked red.
- GG_RSI_CCI1 is also a histogram with signals of three colors. The yellow color of the columns means that the RSI and CCI have come into conflict, and give different information. The red color means that both instruments fix a bearish tendency, and a green color indicates the bullish trend.
Remember that the profitability of this tactic depends on timely and correct indications of technical tools.
Rules for Opening the Positions
Within Igann, market entry takes place by two primary signals: the position of the asset price chart relative to the lines of the indicator, and the color of the histograms.
To find the strong points for opening a buy order, you need to make sure that the chart meets several conditions. Each indicator should give the appropriate signals described below.
- The price chart should be located above the Kijun-sen curve of the Ichimoku indicator.
- Bars of the Gann Hilo histogram should be painted blue.
- Pay attention to the distance between the Kijun-sen line and the closing price of the candlestick that broke through the line. If this value is more than 35 pips, the position shouldn’t be opened.
- The upper and lower histograms must change the color. At the same time, if this already happened a long time ago, then it’s better not to enter the market, since in this case the trend has already turned, and now the trend is losing force.
Following Igann Strategy, open the deal for sale according to the opposite algorithm. Columns of histograms should be green and blue; the price should be located below Kijun-sen.
To avoid losses, be sure to set the Stop Loss orders. At the same time, they should be located not less than 35 pips from the opening price of the order. Also, many traders note the feasibility of installing the Stop Loss right behind the Ichimoku curve.
The developers of the strategy also note an additional way to control losses: as soon as the price of the asset goes up by 50 pips towards the deal, the order must be set to a break even. You can also use trailing stops.
Initially, this strategy was tested on the H1 timeframe, giving a good level of profit. Remember that, if you want to trade on this scheme at other time intervals, you will need to change the settings of the technical tools.
As for currency pairs, the developers describe this system as a multi-currency strategy. However, before starting real trading, we suggest studying each particular pair on a demo account.
Trading on the Igann system, you will receive not many trading signals. According to statistics, this system provides 2-3 transactions per month. Thus, the profitability of such a strategy will be equal to 100 pips a month, which is 1200 pips a year.