Systematic trend-following frameworks can suffer from false signals when market noise overwhelms the true directional moves. In this post, we introduce a two-stage solution: first, we apply multi-timeframe EMA filters to define the prevailing market regime; then we hand off to GATS Strategy 5 on the one-hour chart for precise entry, stop-loss, and profit-target execution.

Regulatory Risk Warning

Trading foreign exchange (“Forex”), contracts for difference (“CFDs”) and other leveraged products carries a high level of risk and may not be suitable for all investors.

• You may sustain a total loss of your invested capital and incur additional losses.
• Past performance is not indicative of future results.
• Before trading, carefully consider your financial situation, trading objectives, experience level, and risk tolerance.
• Seek independent financial advice if necessary.

Stage 1: Multi-Timeframe Analysis

Use these EMA filters to confirm the market regime before considering any executions.

Signal Rules

• Reject any setup when the Monthly and Weekly EMAs disagree.
• Require at least two of the three EMAs aligned (all bullish or all bearish).
• When Macro & Intermediate align, watch for price to retrace to the Daily EMA-200 for optimal entries.

Stage 2: GATS Strategy 5 on the 1-Hour Chart (M60)

Once Stage 1 confirms the regime, GATS executes the automated entries on M60 with these settings:

Common Settings

• Timeframe: M60 (1-hour)
• EMA Zones (color-coded):
  • Momentum Zone: EMA 1–8 (Lime Green)
  • Acceleration Zone: EMA 9–15 (Medium Sea Green)
  • Transition Zone: EMA 16–25 (Pale Green)
  • Value Zone: EMA 26–50 (Light Gray)
  • Correction Zone: EMA 51–89 (Light Coral)
  • Trend Reassessment Zone: EMA 90–140 (Salmon)
  • Long-Term Trend Zone: EMA 141–200 (Brick Red)
• MACD: Fast 8, Slow 17, Signal 5
• DAATS (ATR-based stop):
  • Option 1: ATR 200 × 15
  • Option 2: ATR 256 × 16

Buy Signal Criteria

• EMA Zones indicate a bullish market structure.
• Heiken Ashi Smoothed candles are Blue.
• DAATS sits below the candles.
• Global Time Bars for H1, H4, and D1 are Blue.
• I-Trend (Green line) is above its Red line.
• ADX > 18.
• GMACD Signal, Main & Major Trend Indicators are rising.
• Execution: GATS opens a Long, risking 0.05 %–5 % of Free Equity.
• Stop-Loss: DAATS at chosen ATR multiple (15× ATR-200 or 16× ATR-256).
• Profit-Target: 5:1 R : R → 75× ATR-200 or 80× ATR-256.

Sell Signal Criteria

• EMA Zones indicate a bearish market structure.
• Heiken Ashi Smoothed candles are Red.
• DAATS sits above the candles.
• Global Time Bars for H1, H4, and D1 are Red.
• I-Trend (Green line) is below its Red line.
• ADX > 18.
• GMACD Signal, Main & Major Trend Indicators are falling.
• Execution: GATS opens a Short, risking 0.05 %–5 % of Free Equity.
• Stop-Loss: DAATS at chosen ATR multiple.
• Profit-Target: 5:1 R : R → 75× ATR-200 or 80× ATR-256.

Workflow Recap

1. Stage 1 Filter: M43200 → M10080 → M1440 EMA alignment.
2. Stage 2 Execute: GATS Strategy 5 on M60.

Practical Tips & Next Steps

• Back-test each stage on historical data across multiple instruments.
• Monitor EMA slopes in fast markets—adjust ATR period if necessary.
• Include a small slippage buffer when setting DAATS multipliers.
• Consider adding a volatility filter (e.g., weekly ATR threshold) in low-volatility regimes.

About the Author

Dr. Glen Brown is President & CEO of Global Accountancy Institute, Inc. and Global Financial Engineering, Inc. With over 25 years in proprietary trading and financial engineering, he leads the design of the Global Algorithmic Trading Software (GATS) and its advanced trend-following strategies.

Disclaimer

This post is for educational purposes only. Global Accountancy Institute, Inc. and Global Financial Engineering, Inc. operate a closed proprietary trading model and do not offer services to external clients. All strategies involve risk—past performance does not guarantee future results. Always perform your own due diligence and consider consulting a financial advisor.