Alex grover's G-Channel indicator
A better channel indicator
Technical analysis specialist Alex Grover release the G-Channel indicator in 2019. His intention was to create a channel indicator, which is faster and more accurate compared to the traditional channel indicators (Bollinger Bands, Donchian channel and Keltner channel).
While relatively new, the G-Channel has gained traction with traders and active investors, due to its early trend detection and faster trading signals generation.
How does the G-Channel work?
Contrary to the more traditional trading channels the G-Channel employs a recursive calculation method. This dynamic approach enables quicker trend identification, early reversal detection, and precise visual confirmation when the market is in a range. Notice how the bands are smoother than traditional channel bands.
This example shows the G-Channel bands and the middle line. The middle line is green when the market price is above the line, and red, when the market price is below the line. Notice how the bands are smoother than traditional channel bands.
Using the G-Channel indicator
In trading the G-Channel indicator can be used in three different ways:
- The G-Channel as a trend filter
- The G-Channel generates trading signals
- The G-Channel as a stop loss order.
While the indicator is already quite good on its own, Alex Grover suggests combining the G-Channel with other technical indicators for maximum benefit.
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G-Channel trend filter
This example shows the G-Channel indicator added to the main chart as a filter. When the price is above the middle line the trend is bullish (green background). When the price is below the middle line the trend is bearish (red background).
G-Channel trading signals
A buy signal occurs when the market price crosses above the green band. At the same time the span of the G-Channel must be widening. A short sell signal occurs when the market price crosses below the red band. At the same time the span of the G-Channel must be widening.
This example shows both a G-Channel short sell signal and a G-Channel buy signal.
G-Channel stop loss
Besides using the G-Channel as a trend filter in a strategy, traders can also use the channel as a stop loss to protect positions.
This example shows the stop loss order automatically following the channel. The trader bought a position (green triangle). Using the TradeGuard in the NanoTrader platform, the stop loss order automatically follows the opposite band. The position closed when the market price touched the lower band. If the trend is strong, the band has proven to be a valid level to exit a position.
The G-Channel indicator has gained popularity for its advantages over traditional channel indicators including Bollinger Bands, the Donchian channel and the Keltner Channel. Traders appreciate its benefits such as earlier trend detection, and faster signal generation.
The indicator's simplicity in configuration, along with its potential for various time frames, makes it a valuable tool in the trader's toolkit.
The G-Channel indicator in the trading platform
1. Open the chart of the instrument you wish to trade.
2. In the 'WHS Proposals' folder, open the 'Indicators' folder and select the G-Channel.
3. If desired, change the settings in the Designer Dialog window.
4. Activate TradeGuard+AutoOrder or AutoOrder to trade (semi-)automatically.