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Mister ED's 4 hour Heikin Ashi system

  • #261
  • Jul 21, 2009 1:00pm Jul 21, 2009 1:00pm
Quoting demons19
I read that once you reach TP1, you move the stop to the top of the HA body.
Is this on the long trade or short trade?
Because if we are long and the stop is moved to the top of the HA body, then a short should have the stop at the bottom of the HA body. Make sense?
It should be flipped depending on whether its long or short. So I am not sure which side of the trade he was referring to when he said top of the HA body.
He explained that you move the stop to the top of the wick on a long trade and to the bottom of the body on a short trade.
  • #262
  • Jul 21, 2009 1:03pm Jul 21, 2009 1:03pm
Quoting billbss
He explained that you move the stop to the top of the wick on a long trade and to the bottom of the body on a short trade.

Thanks
  • #263
  • Jul 21, 2009 3:51pm Jul 21, 2009 3:51pm
EUR/JPY is signaling a sell on FXDD- or will be in 10 minutes.
  • #264
  • Jul 21, 2009 3:55pm Jul 21, 2009 3:55pm
Quoting billbss
EUR/JPY is signaling a sell on FXDD- or will be in 10 minutes.
I see the EURJPY, does the GBPJPY also qualify?
I am almost getting gun shy as the GBPUSD is about to down in flames for 4 straight losers.
  • #265
  • Jul 21, 2009 4:02pm Jul 21, 2009 4:02pm
Quoting demons19
I see the EURJPY, does the GBPJPY also qualify?
I am almost getting gun shy as the GBPUSD is about to down in flames for 4 straight losers.
No- g/j is too big a bar. It has retraced. It needs to break the low of the big bar to enter. It needs to do it on this bar.
  • #266
  • Jul 21, 2009 4:02pm Jul 21, 2009 4:02pm
Quoting demons19
I see the EURJPY, does the GBPJPY also qualify?
I am almost getting gun shy as the GBPUSD is about to down in flames for 4 straight losers.
Hi Demons

I would be cautious of the signals today as the last 2 candles on many of the pairs have been massive, and include large retracements.

EURJPY has almost retraced 50% on my candles and it may be more prudent to leave this one or to at least see if it reverses south before commiting.

Not the 100% mechanical trading but sometimes the market is just crazy and it is wise to listen to it.

Mister ED
  • #267
  • Jul 21, 2009 4:14pm Jul 21, 2009 4:14pm
no EJ trade on tuesdays according to the trading schedule unless just practicing for practicing sake
  • #268
  • Jul 21, 2009 4:14pm Jul 21, 2009 4:14pm
Quoting Mister ED
Hi Demons

I would be cautious of the signals today as the last 2 candles on many of the pairs have been massive, and include large retracements.

EURJPY has almost retraced 50% on my candles and it may be more prudent to leave this one or to at least see if it reverses south before commiting.

Not the 100% mechanical trading but sometimes the market is just crazy and it is wise to listen to it.

Mister ED
It might be a good idea to take the EUR/JPY.

I passed on it and I've been wrong all day.
  • #269
  • Edited 5:45pm Jul 21, 2009 5:09pm | Edited 5:45pm
Mister ED, great thread! I've had this indicator for a while but never looked at it the way you presented it. Also I'd suggest that you use FXDD for all other pairs besides gold, they are on +2 GMT I think which means that while it's 7/21 6:00pm in New York, FXDD shows 7/22 1:00am on the 1H candle. The 4 hour bars open at 5pm, 9pm, 1am, 5am, 9am, 1am NEW YORK (EST) times.

I'd appreciate if you'd shed some light on the following trades I took.

GBPUSD S @ 1.6409. The 1pm EST 4h candle opened and since previous bar did not exceed ATR per your rules, I entered at market (althought it was approx 10 pips above open I entered late)...

GBPJPY S @ 153.90. I put an entry order at 38.2 fib of the previous candle because it exceeded.

EURJPY S @ 133.13. Entry order at 38.2 fib of previous candle because it exceeded. All trades were entered today at 1pm NEW YORK EST times.

They are all slightly negative right now, I want your thoughts on whether these signals are valid and if my entries are appropriate or too early or too late. Please advise thanks and keep up with this system, visual backtest looks promising.

P.S. Also one more thing, is it true that the spread on Gold is like 50 pips????? Is it feasible to trade gold when you have to wait to make 50 pips just to break even, or am I missing something here, becuz I wud killl to trade gold..
  • #270
  • Jul 21, 2009 6:29pm Jul 21, 2009 6:29pm
Quoting nubchai
4Freedom just curious as to why EMA 10 is a better filter than some other emas? It does look good. Thanks.
Beats me. I simply spent a few hours adding various SMA and EMA's to the charts to find a way to effectively filter out some of the bad trades without detracting too much from Mr Ed's original system. The 10 EMA on close seemed to work best as a filter (not as a trigger).
  • #271
  • Jul 21, 2009 6:53pm Jul 21, 2009 6:53pm
Quoting demons19
what price did you enter on the eurgbp at?
because my entry candle closed at .8647 + atr27= .8674 and I never reached that high (fxdd)
Hi Demons

I just made it to the exact pip for TP1. The second part is still running but it is slow work. I don't think I'll retire on this one!!

Mister ED
  • #272
  • Jul 21, 2009 7:24pm Jul 21, 2009 7:24pm
finally g/u is coming to live, I am +9 pips
  • #273
  • Jul 21, 2009 7:48pm Jul 21, 2009 7:48pm
Quoting billbss
Correlation (- and +) is something that might be worth considering.

For instance, I'm long EUR/GBP. It's looking like GBP/USD will be a short within an hour.

If one turns on me and gets stopped out, the other one probably will also.

That might be a case of loading up too many eggs in one basket.

Mr Ed may have already looked at this.
Hi Billbss

Correlation is something that I have thought about. It can be quite daunting when a big move comes and you get multiple signals on trades. I have not really found a way around this. However by trading a range of different currencies and variants thereof I feel that this may not be an impossible problem.

The only way that I can offer some form of confirmation is that multiple bad trades on the same day do not happen that often and are made up for by multiple trades going good on the same day.

This is why I find that I have to stick strictly to the system and not jump in early or try to chase or second guess a signal once it has happened. If I do this it becomes subjective, and this is not the system.

This belief has to come from each individual trader and can only be got by back testing and convincing oneself. Anyone using this system should not believe my work but should be able to convince themeselves. It took me months and months.

Sorry for such a long winded reply but I feel it is important.

Mister ED
  • #274
  • Jul 21, 2009 7:52pm Jul 21, 2009 7:52pm
Quoting billbss
Through backtesting.
Which pairs perform better?
What are the monetary results of taking simultaneous trades on them?

That's the only way I know to determine it.

You are correct that EUR/GBP and GBP/USD should move in opposite directions.
That could mean they will both be winners ot that they will both be losers.
Whatever the case, you are risking 6% of your account (at 3% per trade) on what is essentially one trade.
Hi Billbss

Sorry about the last answer, I hadn't reached your reply above. I agree totally with what you say.

Ideally if one has a large enough account you could reduce the correlation risk but capping to overall amount risked for each trade so that it is a constant total eg 3% per trade but with a maximum total risk at any one time of say 15%, therefore if more than 5 signals arise that risk per trade must be reduced. That's what the pro's do.

Mister ED
  • #275
  • Jul 21, 2009 7:54pm Jul 21, 2009 7:54pm
Quoting Fx Optimist
Mister Ed thanks for this simple but effective method.

I wrote a small indicator that just displays the previous bar's range in pips, and also the ATR(20) value and its 50 % & 200 % values.

If the bar pip value is within the other two figures it's ok to enter a normal trade on HA color change, otherwise retrace.

Allows you to sum up the situation at a glance.

^ Chris ^
Hi Chris

Thanks a lot. I will try it tomoorow hopefully.

Mister ED
  • #276
  • Jul 21, 2009 8:05pm Jul 21, 2009 8:05pm
Quoting demons19
I read that once you reach TP1, you move the stop to the top of the HA body.
Is this on the long trade or short trade?
Because if we are long and the stop is moved to the top of the HA body, then a short should have the stop at the bottom of the HA body. Make sense?
It should be flipped depending on whether its long or short. So I am not sure which side of the trade he was referring to when he said top of the HA body.
Hi Demons

The trailing SL is where the variation can start coming in. I said the top of the HA so that there was one rule that fits all. Realistically you are correct in trailing from the bottom of the HA body when going short and the top of the HA body when going long.

When a long trade goes fast I will sometimes trade off the top of the wick. When to do this depends on experience and your own attitude tothe trade.

I didn't want to confuse too many people at an early stage. There are certainly ares of the system that can be adjusted to fit in with your individual temperament.

I hope you will judge the system over the longer term. It does go through ups and downs.

Mister ED
  • #277
  • Jul 21, 2009 8:26pm Jul 21, 2009 8:26pm
Quoting Pipologist99
Mister ED, great thread! I've had this indicator for a while but never looked at it the way you presented it. Also I'd suggest that you use FXDD for all other pairs besides gold, they are on +2 GMT I think which means that while it's 7/21 6:00pm in New York, FXDD shows 7/22 1:00am on the 1H candle. The 4 hour bars open at 5pm, 9pm, 1am, 5am, 9am, 1am NEW YORK (EST) times.

I'd appreciate if you'd shed some light on the following trades I took.

GBPUSD S @ 1.6409. The 1pm EST 4h candle opened and since previous bar did not exceed ATR per your rules,...
Hi Pipologist

The first trade is according to the system. The second and third trade should have enetered at the break of the signal candle low, at the moment I don't enter at the retrace level.

However all your trades appear to be going in the right direction now.

The retracement rules are probably the area that needs most work. I have been looking at this for some time. As they don't come around so much I decided to start the thread to get an EA going and then revisit these rules later. Such is my luck that we go through a period of volatility and we get lots of retracements.

I like the idea of entering the trade at the 32% retracement level and am revisiting it. It makes sense that after a sudden large move teh market retraces and gets its breath before resuming. As with any rule sometimes it will not work but it shows promise.

If you get any backtest results I would love to see them.

As for the candle closing times it seems to be the same old chesnut on most threads. I am thinking that FXDD must have multiple servers on different time zones as results seem to vary a lot. It makes it hard to compare things. This is why ultimately you need to do your own testing to be sure that it works on your charts. I ended up opening accounts with nearly 12 brokers to try to find the server time I wanted.

Finally with Gold I trade with a spread betting firm in the UK and their spread is 6 points which is therefore acceptable. The lareg spread is why I haven't included some of the more exotic pairs. I have been caught by it on NZDUSD a couple of times. On one occasion I was also caught by the "Mysterious Stop Hunter"! That trade p*ssed me off for weeks!

Mister ED
  • #278
  • Jul 21, 2009 8:46pm Jul 21, 2009 8:46pm
Just found the thread, watching with interest. I have a gut feeling this will work on 1H too, but lets deal with the 4H first.

Thanks Mister ED, I am impressed by the amount of work in this Excel spreadsheet and the patience you have to answer everybody here.

all the best.
  • #279
  • Jul 21, 2009 9:43pm Jul 21, 2009 9:43pm
Quoting Mister ED
Hi Pipologist

The first trade is according to the system. The second and third trade should have enetered at the break of the signal candle low, at the moment I don't enter at the retrace level.

So for example, GBPJPY low was 153.09; so I would have to put an entry order short at 153.08 with proper ATR stop and profit targets???
  • #280
  • Jul 22, 2009 2:55am Jul 22, 2009 2:55am
Folks,

Have you ever wondered why there is no lower wick at the HA candles?

By looking at the code there seems to be a programming error and that is why the candles don't show the way they actually should.

This is the current code to calculate the candles:

PHP Code
maOpen=iMA(NULL,0,MaPeriod,0,MaMetod,MODE_OPEN,pos);
maClose=iMA(NULL,0,MaPeriod,0,MaMetod,MODE_CLOSE,pos);
maLow=iMA(NULL,0,MaPeriod,0,MaMetod,MODE_LOW,pos);
maHigh=iMA(NULL,0,MaPeriod,0,MaMetod,MODE_HIGH,pos);
The values for the MODE_ constantes are as follows:

MODE_OPEN 0 Open price.
MODE_LOW 1 Low price.
MODE_HIGH 2 High price.
MODE_CLOSE 3 Close price

According to MQL definition the constants used for the iMA function should be:

PRICE_CLOSE 0 Close price.
PRICE_OPEN 1 Open price.
PRICE_HIGH 2 High price.
PRICE_LOW 3 Low price.

 See the difference?

By adjusting the source code to this, the candles will display correctly.

PHP Code
maOpen=iMA(NULL,0,MaPeriod,0,MaMetod,PRICE_OPEN,pos);
maClose=iMA(NULL,0,MaPeriod,0,MaMetod,PRICE_CLOSE,pos);
maLow=iMA(NULL,0,MaPeriod,0,MaMetod,PRICE_LOW,pos);
maHigh=iMA(NULL,0,MaPeriod,0,MaMetod,PRICE_HIGH,pos);
Am I right or do I get this completely wrong?

AZBOfin
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