Base Trend (BT) Trading Strategy by Dr. Glen Brown: In-depth Analysis
Introduction
Global Base Trend (GBT) Trading Strategy was developed by Dr. Glen Brown, the President & CEO of both Global Accountancy Institute, Inc. and Global Financial Engineering, Inc. The Global Base Trend (GBT) Trading Strategy integrates multiple indicators to help traders make informed decisions over longer timeframes. It focuses on the dynamic interaction of these indicators to pinpoint optimal entry and exit points.
The Global Base Trend (GBT) Trading Strategy is executed by the Global Algorithmic Trading Software(GATS). Global Algorithmic trading is a method of executing orders using automated pre-programmed trading instructions accounting for variables such as time, price, and volume. This type of trading attempts to leverage the speed and computational resources of computers relative to human traders.
Buy Signal Parameters
These parameters ascertain the right time for buying. Key indicators include the EMA Zones (highlighting a bullish structure), the color of Global HAS candles, the position of the DAATS, Global Time Bars, the Global I-Trend, the Global ADX, and the GMACD.
Sell Signal Parameters
To know when to exit or short-sell, traders rely on the color-coded EMA Zones, the Global HAS candles’ color, DAATS positioning, Global Time Bars, the Global I-Trend, the Global ADX, and the GMACD.
Trade Execution and Management
Once the specific conditions are met, the GATS executes the trade. It considers a 2% risk percentage per trade and adjusts the Adaptive ATR Trailing Stop based on 12 times the M60 Average True Range over a 40-period span. Profit targets are set using a 3:1 Reward-to-Risk Ratio.
EMA Zones
These zones categorize EMAs based on their lengths, ranging from the Momentum Zone (shortest EMAs) to the Long-term Trend Zone (longest EMAs).
GMACD Settings
This comprises Fast Length (6), Slow Length (9), and Signal Length (3).
Global Traders Guidance Sheet
This section outlines how traders can customize their trailing stops based on their risk appetite:
- Aggressive Trailing Stop: Targets quick profit protection, placing the stop loss close to the current price.
- Moderate Trailing Stop: A balanced approach, giving the trade more freedom while still securing gains.
- Conservative Trailing Stop: Targets potential larger rewards at the expense of a greater risk, positioning the stop loss further from the current price.
Each type of trailing stop uses a calculated percentage of the Average DAATS, which is then multiplied by 12 times the M60 Average True Range over a 40-period span.
Buy Signal Parameters
The buy signal parameters are integral to recognizing the right moment to enter a trade. The system triggers a buy order when:
- The color-coded EMA Zones indicate a Bullish Market Structure.
- The Global Heiken Ashi Smoothed (HAS) candles turn Blue.
- The Dynamic Adaptive ATR (Average True Range) Trailing Stop (DAATS) situates below the candles.
- Global Time Bars for M60, M240, and M1440 turn BLUE.
- The Global I-Trend’s Green Line surpasses the Red Line.
- The Global ADX (Average Directional Index) exceeds 20.
- The GMACD (Global Moving Average Convergence Divergence) Signal, Main Trend, and Major Trend Indicator reflect an Upward Trend.
Sell Signal Parameters
Just as with the buy signals, the sell signal parameters are critical for deciding when to exit the market or enter a short position. The system triggers a sell order when:
- The color-coded EMA Zones indicate a Bearish Market Structure.
- The Global HAS (Heiken Ashi Smoothed) candles turn Red.
- The DAATS situates above the candles.
- Global Time Bars for M60, M240, and M1440 turn Red.
- The Global I-Trend’s Green Line moves below the Red Line.
- The Global ADX surpasses 20.
- The GMACD Signal, Main Trend, and Major Trend Indicator reflect a Downward Trend.
Trade Execution and Management
After the above conditions are met, the Global Automated Trading System (GATS) places a trade. It sets a Default Maximum Percentage Risk Per Trade of 2%. Moreover, it configures an Adaptive ATR Trailing Stop at 12 times the M60 Average True Range (ATR) using a period of 40. To maximize profits, the Global Profit Target is determined using a Reward-to-Risk Ratio of 3:1.
EMA Zones are defined as follows:
- Momentum Zone: Lime Green EMAs (EMA 1 to EMA 8)
- Acceleration Zone: Medium Sea Green EMAs (EMA 9 to EMA 15)
- Transition Zone: Pale Green EMAs (EMA 16 to EMA 25)
- Value Zone: Light Gray EMAs (EMA 26 to EMA 50)
- Correction Zone: Light Coral EMAs (EMA 51 to EMA 89)
- Trend Reassessment Zone: Salmon EMAs (EMA 90 to EMA 140)
- Long-term Trend Zone: Brick Red EMAs (EMA 141 to EMA 200)
GMACD Settings are Fast Length (6), Slow Length (9), Signal Length (3).
Global Traders Guidance Sheet: Setting Aggressive, Moderate, or Conservative Trailing Stops
The key to setting trailing stops is determining the right balance between protecting profits and allowing your trades to remain open to capture potential further gains. This guide explains how to set aggressive, moderate, and conservative trailing stops.
- Aggressive Trailing Stop:An aggressive trailing stop strategy is typically used by traders who want to protect their profits quickly. This strategy places the stop loss relatively close to the current market price.
Setting an Aggressive Trailing Stop:
- Set your stop loss at 36.9% of the Average Dynamic Adaptive ATR Trailing Stops (DAATS) for your particular asset.
- Monitor your trade closely, as an aggressive trailing stop is more likely to be hit due to normal market volatility.
- Adjust the stop loss level as the price moves in your favor by 369 points.
- Moderate Trailing Stop:A moderate trailing stop strategy strikes a balance between locking in profits and allowing the trade more room to move.
Setting a Moderate Trailing Stop:
- Set your stop loss at 36.9% of the Average DAATS for your particular asset.
- This level allows for some price volatility while still offering protection against substantial losses.
- Adjust your stop loss level as the price continues to move favorably by 639 points.
- Conservative Trailing Stop:A conservative trailing stop strategy is typically used by traders willing to accept more risk for the possibility of larger rewards. This strategy places the stop loss relatively far from the current market price.
Setting a Conservative Trailing Stop:
- Set your stop loss at 36.9% of the Average DAATS for your particular asset.
- This level allows for more price volatility and aims to avoid premature exit from trades that may fluctuate before moving favorably.
- Adjust your stop loss level as the price continues to move favorably by 963 points.
Remember, the selection of an aggressive, moderate, or conservative trailing stop depends on your individual risk tolerance, investment goals, and market outlook. All trading strategies carry risk, and you should always consider your personal financial situation and risk tolerance when deciding on a strategy.
Conclusion
The BT Trading Strategy offers traders a holistic tool designed for the long haul. Its combination of indicators and customizable risk management techniques, such as adaptive ATR trailing stops, offers a flexible yet structured trading approach.
About the Developer: Dr. Glen Brown
Dr. Glen Brown stands as a paragon in the confluence of finance, investments, trading, and technology, with a professional journey spanning over a quarter of a century. As the principal architect behind the Global Base Trend (GBT) Trading Strategy, his proficiency is echoed in the precision and efficacy of the system. But to fully appreciate the magnitude of Dr. Brown’s contributions, one must delve deeper into his illustrious career and the guiding philosophies that shaped it.
Leading the Vanguard: As the President & CEO of both Global Accountancy Institute, Inc. and Global Financial Engineering, Inc., Dr. Brown has cultivated organizations that seamlessly marry the intricacies of accountancy, finance, investments, trading, and the innovative pulse of technology. Under his stewardship, these entities have emerged as benchmarks in the domain of global multi-asset class professional proprietary trading.
Academic Brilliance: With a Ph.D. in Investments and Finance, Dr. Brown’s academic pursuits have been as commendable as his professional endeavors. His vast knowledge encapsulates financial accounting, management accounting, finance, investments, strategic management, and risk management. This extensive knowledge isn’t just reserved for boardroom discussions; as a Senior Lecturer, he is deeply committed to disseminating this wisdom to the next generation of financial professionals.
Multifaceted Excellence: Dr. Brown’s expertise doesn’t confine itself to executive leadership alone. He wears multiple hats with equal aplomb – be it as the Chief Financial Engineer, the captain steering the ship of Trading & Investments as its Head, or as the Chief Data Scientist, sculpting the data-driven narratives of finance.
Philosophical Foundations: Dr. Glen Brown’s convictions resonate deeply with his professional ethos. Believing in the transformative power of self-consumption for rebirth, he champions the human potential for spiritual enlightenment, transformation, and regeneration. This philosophy isn’t merely an abstract idea; it’s the bedrock on which he has built his professional empire, infusing innovation, personal growth, and a relentless quest for excellence in every venture.
Legacy of Innovation: Today, Dr. Brown’s leadership transcends beyond the confines of a corporate setting. His indomitable spirit and visionary approach have sculpted a culture of ingenuity and triumph at Global Accountancy Institute, Inc. and Global Financial Engineering, Inc. He stands as a beacon, illuminating the path to innovative solutions for the complex labyrinths of financial challenges.
In sum, Dr. Glen Brown isn’t just a developer; he’s a visionary, an educator, a leader, and above all, a beacon of innovation in the dynamic world of finance and technology.
Risk Disclaimer
Trading and investing in financial markets involves substantial risk of loss and is not suitable for every investor. The valuation of financial instruments may fluctuate, and, as a result, clients may lose more than their original investment. The impact of seasonal and geopolitical events is already factored into market prices. The highly leveraged nature of trading means that small market movements will have a proportionally larger impact on your funds, which can work against you as well as for you. Past performance is not indicative of future results. Before deciding to invest in financial instruments or foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. Investors should be aware of the serious risks of investing in the financial markets. It is possible to lose your entire investment. We recommend that you seek advice from an independent financial advisor.