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Mister ED's 4 hour Heikin Ashi system

  • #61
  • Jul 16, 2009 1:06pm Jul 16, 2009 1:06pm
Hello Mister Ed, hello fellow traders

I was doing some research on Heiken Ashi and stumbled cross this thread. Your system somehow took my attention and I spent the past few hours paper trading the UJ pair according to the rules you have outlined.

Amazing The simplicity makes this already a winner IMO. I really like the fact of watching just two indicators instead a whole army. It keeps the chart clean and tidy

To catch the big moves I'd suggest to work with partial profit taking and a good strategy of trailing stops, like you have outlined in your manual.
I have found that moving to BE after TP1 works in 99.999% of the case.

I had some instances where the SL based on the ATR value was not large enough and I got stopped out. After further investigation I found that PA climbed to a near S/R or the dailiy pivot line before it retraced into positive territory. Since the SL was below that level I got hit too early. These levels should be definitily taken into consideration when setting the initial SL. If it's near a S/R line, the SL should be on the otherside for an extra 10 pips or so.

Since I work mainly the THV system - which is by the way a masterpiece of work - I have (just to be curious) attached the Trix indicator to the chart. It seems that when the Trix indicator goes into the O/B-O/S area it's time to close the trade and reap the harvest. It'll give some extra gravy pips before it hits the SL.

Keep it up Mister Ed

AZBOfin
  • #62
  • Jul 16, 2009 1:26pm Jul 16, 2009 1:26pm
HA has a weak red on the yen pairs,,,Any thoughts? thx
  • #63
  • Jul 16, 2009 1:30pm Jul 16, 2009 1:30pm
Quoting piptalk
HA has a weak red on the yen pairs,,,Any thoughts? thx
Mines making a red on the USD/JPY- none of the rest of them.
So far the candle is one pip short of 50% of the ATR.
  • #64
  • Jul 16, 2009 1:36pm Jul 16, 2009 1:36pm
OK Thanks,,,,I am on Alpari US,,,And getting a 2 nd red HA,,,on the gbp/jpy,,,usd/jpy,,,etc,,,,,PA very mixed,,,thx
  • #65
  • Jul 16, 2009 2:23pm Jul 16, 2009 2:23pm
Mister Ed are you using this system on GMt+1 or GMT+3.

Reason I ask s coz you mentioned you're using GMT+1 and use FXDD for gold which is GMT+3

Does this mean you're using GMT+1 broker for the fx pairs and FXDD (GMT+3) only for gold?

thanks
  • #66
  • Jul 16, 2009 3:02pm Jul 16, 2009 3:02pm
What a relief is a system like yours, Mr. Ed.

And thanks to Jason and Skissors, and all onboard.

Best to all in this working out for us.

RRhodes
  • #67
  • Jul 16, 2009 3:22pm Jul 16, 2009 3:22pm
Quoting fugly
Mister Ed are you using this system on GMt+1 or GMT+3.

Reason I ask s coz you mentioned you're using GMT+1 and use FXDD for gold which is GMT+3

Does this mean you're using GMT+1 broker for the fx pairs and FXDD (GMT+3) only for gold?

thanks

found the answer in post #51 it seems you only use GMT+3 FXDD for gold.

which broker GMT+1 are you using for the fx pairs?

thanks
  • #68
  • Jul 16, 2009 4:11pm Jul 16, 2009 4:11pm
Hi All

Glad to hear all the questions. I will try to answer things later tonight.

Mister ED
  • #69
  • Jul 16, 2009 5:58pm Jul 16, 2009 5:58pm
Quoting angus
Hey Mr Ed,

Great system, but I do have three quick questions for you.

1. Do you have to trade all the pairs you suggest or could you start off with say three pairs and if so which three would you suggest?

2. Does it matter if there is a gap between the Heiken body and tail?

3. Do you take trades in both directions regardless of say the daily or weekly trend?

Thanks

Angus.
Hi Angus

I am trying to trade all the pairs but it can be difficult with a small account. If you want to start with just 3 pairs it depends on how you look at things as to which ones to choose. The most successful pairs pips wise this year are GBPJPY,Gold,USDJPY. The most successful strike rate wise were AUDUSD,NZDUSD,Gold (however this is using my optimised trades, which for example mean that I only trade AUDUSD on Mondays- but I have 10 out of 10 AUDUSD trades this year using this!)

The gap between the HA body and tail I have noted and it doesn't matter. It usually is just at the start of a trend so just look at the colour changes and not whether there is a gap or not.

I take the trades purely on the HA colour change. The idea is to keep things purely mechanical. I tried looking to go with the trend etc, but it requires a subjective call (eg does the weekly trend over rule the daily trend, what time scale are you looking for a trend, etc). The HA signal is best for showing a change in trend and therefore should allow you to get in at the start. The trouble with trends is that you only know if you are in one once it has got going.

My whole aim is to avoid any subjective examination of the trade, as I am rubbish at this having treid it in the past. I wanted a system that I could show to my children, with a set of simple rules, that if followed would allow anyone (even with no understanding of Forex) to be able to see trades after 10 minutes of using it.

Mister ED
  • #70
  • Jul 16, 2009 6:03pm Jul 16, 2009 6:03pm
Quoting jahual89
attached now
Hi Jahual 89

I do not know how the results would change. I use the HA and ATR only and the system works. I always think that things could be improved, HOWEVER, I have seen too many threads change completely over time and then just fade away. I know my system works from my back testing and so I do not see a need to change it.

Your observation I would place under the optimisation section, and that is for each trader to decide on themselves.

Thanks for looking at the thread.

Mister ED
  • #71
  • Jul 16, 2009 6:04pm Jul 16, 2009 6:04pm
Hi ,,,Just trying to clarify the entry,,,,Does the entry candle body need to clear the HA for the entry to be valid,,, or can it hug part of the HA,,Ok maybe I can aswer this myself,,,Correct me if I am wrong,,,HA turns red or blue,,,Wait for the next 4 hr candle,,,Then measure the ATR,,,If it all coordinates then enter the trade,,,I am a little confused because on the charts diagrams the entrys are shown as the first HA that changes color,,,,,,,,Maybe post chart of your next setup entry,,,Thanks again!!
  • #72
  • Jul 16, 2009 6:11pm Jul 16, 2009 6:11pm
Quoting AZBOfin
Hello Mister Ed, hello fellow traders

I was doing some research on Heiken Ashi and stumbled cross this thread. Your system somehow took my attention and I spent the past few hours paper trading the UJ pair according to the rules you have outlined.

Amazing The simplicity makes this already a winner IMO. I really like the fact of watching just two indicators instead a whole army. It keeps the chart clean and tidy

To catch the big moves I'd suggest to work with partial profit taking and a good strategy of trailing stops, like you...
Thanks for looking at the system. I see a lot about people talking about support and resistance lines. These are always going to be subjective. The pure aim of this system is to be simple and mechanical and therefore repeatable.

Your comment on the Trix indicator is interesting but I would place it again in the optimisation section of the strategy, and that is up to the individual trader.

I hope over the weekend to show my Excel spreadsheet and thereby explain how I have optimised things. My optimisation is based purely on timing of successful trades and comes from my spreadsheet results, not from looking at the charts. Again the reason behind this is to be mechanical, reproducable, unemotional, flexible and most of all profitable!!

I am not a professional trader and I don't think I could every be one, but I do feel I can make money with this system.

All the best,

Mister ED
  • #73
  • Jul 16, 2009 6:33pm Jul 16, 2009 6:33pm
Quoting fugly
Mister Ed are you using this system on GMt+1 or GMT+3.

Reason I ask s coz you mentioned you're using GMT+1 and use FXDD for gold which is GMT+3

Does this mean you're using GMT+1 broker for the fx pairs and FXDD (GMT+3) only for gold?

thanks
Hi Fugly

I get my signals from Metatrader. I am based on Atlantic Canada time which is GMT-4 according to Forexfactory. This allows me to place my trades at 10pm/2am/6am/10am/2pm/6pm local time.

When I look at my FXDD chart and my Metatrader they show the same time, which is 6 hours ahead of my local time.

The reason I use Metatrade for my charts is that their server time works well for my day. I have used other servers and the results were not so good and the timing inconvenient. As far as the better results it could be that the candle formation times do not coincide with most of the big releases and so for example on NFP days the candle closes half an hour after the result. I think that this gives enough time for the market to settle whilst allowing me to get in early on the change in direction if indicated.

The candles do vary slightly between servers though, but it probably doesn't make a massive difference. My setup is partly a lifestyle situation.

All the best

Mister ED
  • #74
  • Jul 16, 2009 6:41pm Jul 16, 2009 6:41pm
Mister ED when you get around to it, the excell file would be great! Thanks

What minimum account size would you recommend at say 1 dollar per pip Mini or 10 cents Micro to properly take all trades as per your backtesting and forward testing results ?

Thanks
  • #75
  • Edited 6:51pm Jul 16, 2009 6:51pm | Edited 6:51pm
Quoting piptalk
Hi ,,,Just trying to clarify the entry,,,,Does the entry candle body need to clear the HA for the entry to be valid,,, or can it hug part of the HA,,Ok maybe I can aswer this myself,,,Correct me if I am wrong,,,HA turns red or blue,,,Wait for the next 4 hr candle,,,Then measure the ATR,,,If it all coordinates then enter the trade,,,I am a little confused because on the charts diagrams the entrys are shown as the first HA that changes color,,,,,,,,Maybe post chart of your next setup entry,,,Thanks again!!
Hi Piptalk

This is the latest setup.

The HA candle that is the first to completely change is at 08:00

I measure my ATR at this time and it is 27 pips.

When the new candle opens I immediately open two trades going long.
TP1 is 27 pips for one of the trades and the TP for the other trade is left open until TP1 is hit and is then trailed. Both trades have a 27 pip SL.

After a slow start it looks like thing are close to hitting the TP1. At this stage the first trade closes and then I move the SL for the second trade to either the top of the HA wick or the top of the HA body depending on which rule you want.

I hope this helps,

Mister ED
Attached Image (click to enlarge)
Click to Enlarge Name: ha screen shot16.gif Size: 46 KB
  • #76
  • Jul 16, 2009 6:53pm Jul 16, 2009 6:53pm
Yes ,,,Very good,,,Thanks for your input!!!
  • #77
  • Jul 16, 2009 8:56pm Jul 16, 2009 8:56pm
I took that trade on demo. Didn't use trailing stop, just plain one trade (sl 27, tp27). I know you want things mechanical and simple, but still wonder if you ever use basic things like support, resistance and trend on daily chart to filter out some signals ?

Excellent work!



Quoting Mister ED
Hi Piptalk

This is the latest setup.

The HA candle that is the first to completely change is at 08:00

I measure my ATR at this time and it is 27 pips.

When the new candle opens I immediately open two trades going long.
TP1 is 27 pips for one of the trades and the TP for the other trade is left open until TP1 is hit and is then trailed. Both trades have a 27 pip SL.

After a slow start it looks like thing are close to hitting the TP1. At this stage the first trade closes and then I move the SL for the second trade to either the top of the...
  • #78
  • Jul 16, 2009 10:13pm Jul 16, 2009 10:13pm
Quoting seafront
I took that trade on demo. Didn't use trailing stop, just plain one trade (sl 27, tp27). I know you want things mechanical and simple, but still wonder if you ever use basic things like support, resistance and trend on daily chart to filter out some signals ?

Excellent work!
Hi Seafront

All the trades that I have based the stats on a purely based on what the colour changes say. I am sure that if you use trends etc you can improve on these figures. However I think that these would be impossible to easily incorporate into an EA effectively.

I also am not proficient enough at these things to use them effectively enough to benefit me. I believe these things work, but not in my hands. I admit I am not a very disciplined trader and so have tried to develop a system that suits my character.

All that I would say is if you use these things then be prepared to live with the results, good or bad. I find it better if I just have to do what the computer tells me to do.

There are certainly ways to optimise things.

EURGBP is showing significantly better results if the trades are left to run this year, hence the two parts. However you can never complain if you have got out of the market having secured some pips. I am always trying to maximize my return whilst exposing my self to loss for as short a period as possible. It's always nice to get a free trade though.

Interestingly AUDUSD has not performed well on Fridays this year so I would avoid. Everyone of the other pairs could show a set up on Friday.

See you tomorrow,

Mister ED
  • #79
  • Jul 16, 2009 11:08pm Jul 16, 2009 11:08pm
HI Mister ED,
Good Job on this system, just a question to ask, what do you means by If the signal candle is between 50% and 200% of the ATR value for that candle then it is a valid trade? How to do this calculation?

Thanks
  • #80
  • Jul 16, 2009 11:22pm Jul 16, 2009 11:22pm
Thanks a lot, Mister ED!

I am not trying to "optimize" the system. I was suspicious that you had some secrets (discretion part) you didn't tell us! Really happy to know you trade as it is.

Quoting Mister ED
Hi Seafront

All the trades that I have based the stats on a purely based on what the colour changes say. I am sure that if you use trends etc you can improve on these figures. However I think that these would be impossible to easily incorporate into an EA effectively.

I also am not proficient enough at these things to use them effectively enough to benefit me. I believe these things work, but not in my hands. I admit I am not a very disciplined trader and so have tried to develop a system that suits my character.

All that I would say is if...
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