Mister ED's HA trading journal

Hi Mr Ed.

I found your thread on the HA 4-hour trading system and am very interested in it.

In scanning through the thread, I see that someone made an attempt at developing an EA based on your strategy that was partially successful. But I didn't see any additional references. Was an EA ever developed?

I have been a programmer for over 30 years, trading currencies for 2 years and writing EAs since last summer. I will develop this for myself at least. If you're still interested in it let me know. Perhaps a private email would be appropriate.

I like to build systems in small chunks. Since downloading your material yesterday afternoon, I have enhanced the Heikin Ashi Smoothed indicator to include a table of data on the right side of the screen that shows the HA-High, HA-Low, HA-Range, & HA-Range x 2. I am using this last data to quickly see if the HA-Range is greater than 50% of the ATR-20.

So far, I have been unsuccessful at accessing the ATR in the HA indicator for comparison purposes. If the other person who worked on his/her own EA would care to collaborate, I would appreciate it.

You have done a great piece of work in developing this, and a very good thing in sharing it with the community. Keep up the good work.

Chuck

Hi Chuck

Yes there have been attempts at developing an EA but with varying successes. At the moment I am not using the EA as it is still not reliable enough and I have not had time to test it thoroughly. Too busy with the day job!!

Also the last month or so has not been kind to the system so I think a lot of people have given up. Still this is always the way with a mechanical trend system. I feel that thismonth is also likely to be slim picking but I feel that things will change in the New Year when some direction returns.

I would certainly be interested to see how you develop things.

I will keep posting my trades for the week so that you can compare things as you go.

All the best,

Mister ED

[quote=ChazzFX;3308450]Hi Mr Ed.

I found your thread on the HA 4-hour trading system and am very interested in it.

In scanning through the thread, I see that someone made an attempt at developing an EA based on your strategy that was partially successful. But I didn't see any additional references. Was an EA ever developed?

I have been a programmer for over 30 years, trading currencies for 2 years and writing EAs since last summer. I will develop this for myself at least. If you're still interested in it let me know. Perhaps a private email would be appropriate.

I like to build systems in small chunks. Since downloading your material yesterday afternoon, I have enhanced the Heikin Ashi Smoothed indicator to include a table of data on the right side of the screen that shows the HA-High, HA-Low, HA-Range, & HA-Range x 2. I am using this last data to quickly see if the HA-Range is greater than 50% of the ATR-20.

So far, I have been unsuccessful at accessing the ATR in the HA indicator for comparison purposes. If the other person who worked on his/her own EA would care to collaborate, I would appreciate it.

You have done a great piece of work in developing this, and a very good thing in sharing it with the community. Keep up the good work.

- - - - - - - - - - - - - - - - -
Hi Chuck, can I make the polite suggestion that you read the whole Mr. Eds strategy thread through from the start - a big job I know, but that way you will see the development of the indicators, the method into EAs and also some people lack of effort in self testing them. Also look up in the top right hand corner and you will find the indicators and EAs attached.

Rgds,
McKevvy

The EA that Longbar supplied works perfectly. The flaw so far, is not with the EA or the people testing it, it is with this strategy and it's agreement with the current market conditions. There is also some considerable discretion used by Mr. Ed and his personal trading that cannot be built in to an EA.

Hi Wrenski

I agree totally. I am tending to think that an EA is not possible to cover all the options that are required.

As is often the case one announces a system to the world and it tanks. I believe that it is related to the timing of the market and so will come back better in the New Year when trends start emerging.

All the best
Mister ED

Mr Ed...I have interpreted your setup instructions to the best of my ability and developed the attached indicator. (While others may have done the same thing, I don't like working with "black boxes", hence this effort.) This indicator is a modification to the Heiken Ashi Smoothed code that you provided...additions include:

 

1. All the external parms have been changed to default to your settings.
2. A list in the upper righthand corner of the chart to show characteristics of the HA candle in question.
3. Two new parms have been added to enable audible and email alerts when the conditions are right for opening a trade.

If you didn't know before, I'm sure you've found out that what is clear as a bell to some people looks like mud to others...and vice versa...we're all wired differently...so thanks for your patience. That being said, I'll explain how this indicator works (I was able to upload my screen shot...but couldn't figure out how to display it in line):

 

1. HA Candle 0 is the right-most candle on the chart.
2. The HA candle we're interested in is identified as HA Candle 1...this candle is not fully formed until Candle 0 appears, so I don't look at Candle 1 until I can see candle 0.
3. I'm interested in Candle 1 because it is entirely one color, and that color is different from the preceding candle, Candle 2.
4. In the example shown, the max - min of Candle 1 is 24.3 PIPs. (I call this the HA Range.)
5. The ATR for the same time period as Candle 1 is 62.2 PIPs.
6. A quick calculation lets us know that the range of Candle 1 is only 39.1% of the ATR, so no trade is indicated.
7. Had that range been 50% - 200% of the ATR, a trade would be indicated and if the input parameters had been set, an alarm would sound and an email would be sent saying "Heiken Ashi Trade has developed for GBPJPY".

If you have time to validate my interpretation of your setup, I'd appreciate it...if not, I'll understand.

Thanks, ChazzFX

Well not a great week at all. We are just out of synch with the market at the moment.

GBPJPY
14 Dec
4:00 SL 100
Closed for -200 pips

17 Dec
12:00 SL 68
Closed for -135 pips

GBPUSD
15 Dec
12:00 SL 63
Closed for -126 pips

EURJPY
14 Dec
4:00 SL 75
Hit TP1 for +75 pips and trailed TP2 for +15 for total of +90 pips

15 Dec
16:00 SL 67
Closed for -134 pips

18 Dec
20:00 SL 64
Still ongoing

EURUSD
no trades

USDCAD
18 Dec
16:00 SL 44
Still ongoing

EURGBP
no trades

AUDUSD
8:00 SL 41
Closed TP1 for +41 pips and trailed TP2 for +150 pips for total of +191 pips

AUDJPY
14 Dec
4:00 SL 63
Closed for -108 early

16 Dec
4:00 SL 42
Closed for -84 pips

18 Dec
16:00 50
still ongoing

NZDUSD
no trades

USDJPY
15 Dec
4:00 SL 41
Hit TP1 for +41 pips and trailed TP2 for +65 for total of +106 pips

18 Dec
4:00 SL 42
Closed for -84 pips

8:00 SL 45
Hit TP1 for +45 still trailing TP2

Gold
17 Dec
12:00 TP75
Hit TP1 for +75 pips and trailing TP2

Currently therefore at -676 pips for the week, what a mess.

Not really looking to trade at all this week but will still be recording the trades.

Currently looking at other ways to trail the TP2 but not done enough checking yet.

All the best
Mister ED

interpretation of your setup, I'd appreciate it...if not, I'll understand.

Thanks, ChazzFX[/quote]

Looks good so far but I will need to try and look at it better next week.

All the best
Mister ED

Mister ED: I have completed coding and started testing my EA based on your strategy...however, I am not coming up with the same trade entries you have posted.

Since I don't know if I'm interpreting your rules correctly, I will hold off on posting results as well as further testing until I get confirmation from you.

TIA...ChazzFX

Keep in mind that the start of a 4hr bar very much depends on the time zone of your broker.

After some trial and error, I was able to correct the bugs in my previously attached indicator and re-align the bars checked. Then, being a DYI-kinda guy, I wrote an EA based on a very simplified (and slightly modified) version of Mister ED's strategy.

Once I began testing, I researched LongBar's EA and agree completely with wrenski's assessment. LongBar did quite a thorough job with his EA and I have begun testing it side-by-side with my own.

From what I have seen so far, my modifications to Mister ED's strategy have some merit. I intend to incorporate these mods into LongBar's EA for testing next week:

 

1. If the ATR-candle ratio is 10% to 50%, I enter the trade with lower TP & SL values (20% to 100% of the ATR). For example, if the ratio is 20%, my TP and SL are set to 40% of the ATR.
2. I am experimenting with reducing the SL to improve the Reward/Risk ratio. Currently I am using 95% of the ATR without exiting any trades prematurely. I intend to backtest reduced SL values and will report my findings if any interest is expressed.

ChazzFX

Hi Chazz

Sounds interesting. Reducing the SL values always runs the risk of closing things prematurely.

I haven't published my trades this year as it takes too long and I am trying to focus on other things. Still this month I am +882 pips on the 10 pairs using the optimised trades as originally set out. Currently there are lots of long wicks on many of the candles which doesn't make for an easy life. I am considering setting daily targets to lock profits in because often things look good and then it retraces and most is given back. This is a project in the making so I will report back when I too have some results.

All the best
Mister ED

For my own benefit, I created the attached document from various comments by LongBar in this Forum and in his code. It is not my intent to steal his thunder, but I offer it here for nubies like myself...maybe it will reduce some of the repeat questions.

LongBar & Mister ED, I'd appreciate it you would look this over and update as you feel appropriate as your time permits.

TIA...ChazzFX

Hey Mr Ed -

After reading most of the posts on your Trading System thread I hopped over here to see how things were going for you.

Sorry to hear about the lousy end of 2009. Has 2010 treated you any differently?

Now that you've gone through the rough patch is there anything that you were able to look behind at and see why it did what it did? Was it just the choppy market? Any corrections or additions that could have helped?

Hope things are going well with you.

Thanks -

Hi Mr Ed,
Thank you for all the hard work and your in depth analysis of this system. This is just the type of system I have been looking for that suits my work / life situation and I can access the trades to all the 4 hour intervals. The system also takes out the stress of trading short time frames with large lots that may give similar results but a nervous break down along the way. I have been back trading standard HA on varying time frames for quite a while now but your smoothing of the HA gives a much clearer picture of the trade in trend and good trailing points.

I have studied the excellent thread of pipEasy re the equity millipede. Graeme's emphasis on holding trades over longer time frames shows very good results. Combining some of his teaching with your system there appears to be good potential for growth.

I notice that say like this week the trades seem to be burnt out once they paint the HA on the first move and then reverse. Have you considered using different settings to the HA other than the 2 6 3 2? Does 2 4 3 2 give an earlier entry point or do you have other suggestions that you have tried?

Loading the standard M4 HA over the chart as well and changing the candles to bars, helps to give earlier signals on the run to your HA. Have you looked at using this to then get earlier entries say by setting orders just on the positive side of your HA (like the wick) when the standard HA is painting reversing candles, to get the run through and pick up the initial break. This seems to then give a much better chance of the trade succeeding or going BE. The laying of the standard HA over the chart also helps to identify earlier exits when the run is starting to die.

Also trading so many pairs is quite prone to large drawdowns. I find this a bit too hurtful to my limited account budget. I want to concentrate on fewer pairs and cut down on the choices that 10 give. If you could pick the 5 best pairs out of this list what would they be.
EURUSD, GBPJPY, GBPUSD, USDJPY, AUDUSD, EURJPY, EURJPY, EURGBP, USDCAD, GBPCHF, EURCHF

Hopefully you can be of assistance and thanks again for the enormous amount of work you shared in your threads.

Is there anyone trading this way, even Mr Ed? Thanks