Heiken_Ashi Smoothed Indicator - steinitz method

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Great question. On the smoothed version "HAS" make sure you set the inputs to 2-6-3-2 in that order.

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USe 3 Charts for each currency pair with the following Time Frames 30M, 1H, 4H.

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Basically you take the shortest TF and when you see a change in color from red to blue go long. You must look at the next TF that is double the previous i.e 15M to enter so you look at the 30M. If the 30M is not ALSO blue don't enter. A typical trade would be the following:

15 minute is trending up and you see 1-5 blue bars. So the 15M has been moving up for a short while causing the 30 minute to just start creating it's 1st blue bar. Now go long. You can exit when the 30 minute just starts to hint of a red bar.

If you want a longer trade you can stay in until you see the 1 hour just turn from red to it's 1st blue bar. Now you exit on the 1 hour when you had enough fun or the blue bar on the longest TF being the 1h in this example just hints of a change in direction. That would be a small body with higher wick:body ratio and the start of a color change.

I hope this makes sense. Look at my charts !!!!!!! Study study study

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Excellent question! I have looked at the same thing you mention here and found a solution with better exit. Like you said enter on your 15m and confirm with the 30M. Now here is where I found a better entry. Don't worry I will address the exit soon.

The 3rd longest TF does not have to give a same trend color as the 2nd longest TF. In fact, for a better trade lasting longer look for the 3rd longest TF NOT showing the same color of desired trend but and opposite color. More importantly and needed at the same time is the candle stick or line graph of price needs to be moving up or down (depending on the initial direction of desired entry) close to and touching if possible the Heiken-Ashi candle. 

Here is the reason: You will find that this is considered an early move since the longest TF, in this example the 1h has not quite changed colors but hinging in the desired direction which in time will cause the Heiken-Ashi candle to finally change color of the desired trade and you will find a perfect set-up.

Had you traded with the longest TF showing the same color as the initial trade you would have already been in the beginning or middle of that trend.

Now for the exit. If you wait for the 3rd longest TF to show an opposite color you waited too long and lost too much profit! So here is the answer. What ever TF you are looking at, if the Heiken_Ashi candle is turning the wrong color flip to the next longest TF and if that TF is looking strong STAY IN! If not strong EXIT. You might find that you started with a 15M, 30M and 1H and actually ride a long trend and exit on the 1D TF. You will love that trade!!!

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I do want to stress one more time that there is not just one way to enter and exit this indicator. If somebody put a gun to my head and asked the best set-up I would reply "Take my G-D damn wallet".

Sorry. Turrets syndrome. No really this is what I recommend:

1. Enter long or short on the lower TF. Again about 1-5 candles in the same color. 

2. Look at the next longer TF. If the candles are going in the opposite color BUT the line chart is pointing and actually starting to penetrate the HAS candles that is good.

3. Third TF is not that important but if it shows signs of weakness i.e. wick:body ratio (Higher wicks and smaller bodies), HAS candles starting to hindge and price also hinging too you have an extra chance that your trend will continue longer.

So what I want is the lower TF to march forward in the desired color, Then I want the next longer TF to just start to change color. If you wait for the 2nd longest TF to already show the same color you have waited longer for solid confirmation BUT gave up some extra PIPS. Thise extra PIPS are usually a lot since price has the strongest velocity when price reverses.

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Here are the rules for long entry:

1. lowest TF must be at least one blue HAS candle.

2. The next highest TF must be a (blue wick with a red body or a (blue candle) and/or price must be >= HAS candle. [You need to look at the HA,val 2,3 or 4 and HLOC prices to figure what would be representive of this]. 

3. Note: if we made price > price [1] bar ago we would obtain a better angle.

Here are the rules for long exit:

1. Current TF displays it's first opposite candle color AND next largest TF is an opposite color of initial trend

Here are the rules for staying in trade when current HAS candle turns opposite color. 

1. Go to next higher TF and if HAS bars are the same color stay in trade.

Reverse everything above for a short entry and all rules that followed.

This should be a good start.

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Originally Posted by steinitz  
I was actually thinking about this earlier to explain something over again that maybe some people just glanced over. There is a difference between current TF and lowest TF. The lowest TF referrs only to the initial entry on whatever you choose to be your desired TF's i.e. 30M, 1h, 4h & day or 1M , 5M, 15M & 30M. I am know using terminology that includes 4 TF's because of the new indicator introduced today.

Keep in mind that all you need is 2 Tf's and maybe a 3rd if you wish. But 2 will get the candy. Now, let's say you enter long (blue candle) on a 5M (lowest TF) and confirm on a 15M also a blue candle or blue tip on a red base candle or price line penetrating HAS candle (optional method). If you are confused STOP and re-read my instructions and come back.

Now your job is to forget about the 5M and concentrate on the 15M TF ONLY! Ride the 15M as long as it stays blue. Once it changes from blue to red or red wick on a blue body switch to 30M and see if it is blue. If it is stay in and ONLY monitor the 30M. You never go backwards.

As soon as 30M changes from blue to red or red wick on a blue body go to the 1H chart and stay there. You could actually start with a 1M chart and end up with a daily chart before you get the exit signal. They means a lot of PIPS!

Note: The optional price line penetration method ONLY applies to step ONE when you enter on the lowest TF and confirm with the next higher TF which you have a choice to confirm with a sold color candle, desired wick color on opposite color body or the price line penetrating the HAS candles.

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