Heiken Ashi

Hi This method derives from a trader you either love or hate ..personally my mind is always open and as a good trader friend of mine in South Africa is trading using his black box system and making very nice gains albeit you have to use good money manegment I thought Id take a look my self.

2 nice advantages about this way of trading

1 indicator only so a nice clean chart
Mechanical entry criteria

From what ive seen can be used on nay time scale although Im looking to use it for daily end of day trading across a dozen pairs.

Open a weekly chart and a daily chart on any pair and put the Heiken Ashi smoothed indicator on both.

Look at you weekly if the trend is up so blue bars go to your daily and wait for the bars to go from blue to red which indicates a retracement then go long when

A - The HA goes blue again
B - We have a down bar

With the weekly trnd in place ie HA blue I personaly want a great entry I get this on longs by going long on a down bar with the weekly trend in place im not too worried...I certainly dont want to go long on an up bar only to see a 75% retracement the folloing day which happens suprisingly alot.

Target is up to you I tend to go for 5 day average true range or if long the 1st red HA bar.My stop is often the last swing low

here are a few pics to show entry

All on the EURCHF I have shown..

1day 1week chart
1hr 4hr chart
and last 3 signals on the daily chart notice the daily signals are all taken on ..

Shorts on long bar
Longs on down bar

have fun

Paulus

here is a chart of prob the most favored swap EURUSD

On the 4hourly I have marked the trends and called them ABC

Ive then marked the 1hr signals using A for signals in the 4hr A trend, B for signals in the 4hr B trend etc etc

Ive taken the entry measured to the last swing low and what ever the pips difference is Ive taken as a target to get a 1:1 RR looking at the chart you could of gone for 2:1 and had the following

-29 +202 +72 -76 +64 +158 = +391

the chart shows

+29 +101 +36 -76 +32 +79 = +172


The yellow tick represents my stop as the last swing high low position..dont forget good money manegment is essential with any system to trade 3 contracts on the 1st B signal and 3 contracts on the 1st C signal would be reckless ,once you have worked out your max loss per trade based on your trading account size ..you may decide not to risk more than 5% on any given signal once you have worked that out you would prob go 1 contract on the 1st B signal and 3 contracts on the 1st C signal.


Paulus

nice and simple.

do you trade this live. what is your win-loss ratio? wat about usiing 4hr trend and 15m entry...i mean other tf trading this method....c

curious one

Only been trading it a couple weeks im into day trading with forex really and have posted my exploits with that on this forum but my life is changing and end of day trading looks like it will suite my life better.

The system this type of system follows does very well and ive done very well on it so far however no matter what time frame your entering on you should always be looking at the next time frame higher to judge the trend.

15mins and 4 hour wont work I dont think ....its like using a weekly chart and entering on 1hr chart

I think the ideal ratio is one time frame above your entry time frame you can also use fibs to judge your exit again its all quite mechanical in the case of a short measure the retracement and set a target of the 161.8 level as per the chart

Paulus

hi...nice system bro..nubie here,just need your comment.your "exit point/SL" is when HA change colour.is that correct?..

Please take a look this picture (your exit point/SL)..And 1 more question.Do you waiting till bar to close,or just make entry when HA change colour?

btw this is my 120 pips from GJ..thanks bro..

Hi KP

My stop loss is the last swing low for a long swing high for a short my target is worked out on my stop loss to give a risk reward of 2 to 1 I then apply money management to work out contract traded

I should in theory end up making the same money on a trade trading 1 contract as i do trading 10 contracts and should in theory take the same loss.

The bigger the stop loss the lower number of contracts I trade,

on a 10k account risking 5% per signal gives me $500 max loss on a signal trade.. If Im trading a swap at $2 a pip and my stop loss is 100 pips then I can trade 2 contracts and lose $400 if my stop loss is 200 pips then I can trade 1 contract and lose $400

here is the sl and tp chart all above are examples only

hope it helps

One of my 1st trades

Ok..i see..i'll trying to get pips with h1-h4,with D1 trend.so far so good..thanx Paulus...Happy pips!

Btw Paulus,do you have any suggestion about re-entry?...or,you wait another swing?...

Nice and Simple...plus, it works!


Keep it up folks.
Good trading!
Brent

Hi

Yes I wait for another swing so if long I wait for red HA then enter on blue again as long as the longer term trend is showing blue HA.

I wait for candle close or as close as on end of day trading I dont think its too important with a larger stop due to the last swing high or low and a larger target 5 pips here and there on entry is not going to make a lot of difference in the grand scheme of things

however on smaller time scales the timing has to be tighter
cheers

Paulus

These are the last 3 signals on CADCHF

Ive marked the normal entry plus the swing lows for the stop position.

Dont forget money manegemnt will prevent a lrage stop hurting your account and the number of contracts you trade should vary with each signal unless the stop size is the same.

The vertical dotted red line is the point at which the weekly HA went blue in fact it was on 20th July

the 1st signal failed as the swing low was taken out the next 2 made thier 2:1 RR.

So apply a fictitious pip count but applying money manegment

1 st trade - Lose $200
2nd trade - Make $400
3rd Trade - make $400

Total $600 the $ values are fictious but the theory is correct if you make twice as much on a winner as a loser and you apply MM your account will grow all you need is a system with an edge.

Dont forget a casino allows for only 3% gain on turn over but with the huge volumes of money they move they make a fortune

As you can see by the chart as long as the week HA stays blue Im waiting for a blue HA on this daily chart to go long again

cheers

Paul

wooowww
this system is great...simple...
1st : -45
2nd : 200
on GBP/JPY TF1H - 4H. It's work bro!...thank you..

R'j

latest signals been checking system doing fine must use money manegment stops can be big as using last swing high or low..

I am looking for long time about *Trader Dynamic Index * Indecator , it would be nice of you if you could tell me where can I get it
Thanks

Hi Paulus

I have been looking at your EOD system and it seems to be doing well. However the SL are too large for me at the moment so I would rather work on a shorter timeframe.

I have been back testing this system over the past 5 years on some pairs and have found it to be very reliable. I have also forward tested it on 10 pairs over the last 3 months and it still has been very good (although this month has been very volatile).

I like the system because it is mechanical and takes a lot of the emotion out of trading.

Are you still using the system or are you concentrating totally on the EOD.

All the best,

Mister ED

Mister Ed

Can you send me your info via email please or post in this thread Im just doing eod live atm owing to personal reasons.

Thanks for your faith and hard work

Cheers

Paulus

Let's continue this thread.