Trendlines with Heiken Ashi and Stochs System

Thanks, glad you're liking it.

Quite a bit of volatile choppy movement today. Gbpchf stopped out for +100 and Gbpjpy stopped out at breakeven. Not bad so far then, eurgbp +1 pip and gbpchf +100 a running total of +101 pips. Not quite as much as I would have expected but we are in the quietest time of the year for decent trends.

Gbpusd looks like a possible trade but the movement to the left is very choppy and the 100 ema is moving sideways signalling the lack of much of an acual trend so I will pass.

Other than that it is very quiet with not much setting up so now is the time to sit on your hands and watch. When the perfect setup comes along there will be big pips to be had so there is no rush.

I'll keep you posted when something comes up.

Not much has been setting up recently, the summer can be quiet for decent trends, so I have adapted the basics of my method to suit the conditions.

A viable way to trade Heiken Ashi candles is to draw s/r lines and trendlines on a chart and just trade HA colour changes near those levels.

I'll try and post a few more examples tomorrow but here's usdcad taken this evening. The 1.000 parity level looks like holding the price below it, HA changed colour (I missed Fridays entry but today looks ok). That's a 100 pip stop loss.

This is usdchf, be nice to see a red HA candle within the next few days.

Here's another trade, euraud.

I must say pretty good stuff man...nice approach...very clean charts

Thanks. I'm not trading it so much over the summer period which was why I was looking into that other thread but when things start trending again this is a really good way to make some nice money.

i m also following similar system down to H4...

why is this thread dying....


I request ppl here to share their findings and lets rock the money on the table......

I ll start posting also
and ask ppl to please share as well

Just finished reading and studying the thread. Simple but effective. Nice clean and uncluttered charts. I plan to follow. Looking foward to more posts.

Hi Winston, things are pretty sideways at the moment so not much going on but patience will pay off, when we get back into trending markets we'll be quids in.

Some interesting charts to be watching. We're getting back into trending season soon, there should be some action in the next few weeks.

At the start of this thread (or maybe the original one?) I spoke at length about new traders needing to only trade daily charts until they get it right. I'm still of that opinion but over the summer whilst it has been quiet I have been trading 1 and 5 min charts using a very similar method to my daily system.

My own personal view is that you shouldn't be afraid of trading the smaller timeframes. Daily takes a lot of patience because you can sit and watch the charts for weeks and not have a clear and valid signal and then you get one and promptly lose 200 pips. Of course the long term, 1000 or 2000 pip trades don't happen all the time but you're never going to catch one of them trading 5min eurusd!

You need to have a balance in all things and if you have been trading daily charts for a while and got that right then don't be afraid to look at other timeframes. The advantage of course of trading lower timeframes is that you can use a bigger position size and still only risk a small percent of your account. If you're going to start trading 5 min charts then I suggest sticking to the majors because of the lower spread and start with 0.01 (or whatever your minimum is) positions. A 10 pip stop loss at 0.01 is £0.62p at the current pip value! You can lose a lot of those until you get it right and the key thing is to cut your losses short and let your winners run. It's always down to money and trade management. That's why I like Heiken Ashi candles, they nearly always keep you in a good trade longer. If you've caught a good trade and have some pips locked in then don't close it until a HA candle closes against your trade. This can be 10 or 15 candles on 5 min charts netting you 50 to 100 pips on a good trend!

Now I have started trading lower timeframes I will definitely continue because it only takes 2 or 3 good trades a week (!) to pull in a nice sum of money and it complements my longer term trading nicely. Maybe it merits a different thread to discuss the slightly different strategies involved. Anyone interested?

Hi Hugh

I have read your thread and I find it interesting and enjoyable. I will be following your methods on the long term time frames closely on my demo account. thanks for sharing!

Slurpee from the Trading Journal is using a very similar system to yours.(Daily easy no stress charts). He uses the 100 ema as a trend identifier and enters on the stoch cross. With your HA candle, this cross is actually confirmed. I will be following your thread as well. Thanks for sharing.

Thanks for the info, I'll take a look.

Usdchf, eurchf and gbpchf are setting up nicely by the look of things. I've got entries on 2 of them already from hourly charts and I've got pending orders so if it breaks todays low then I'm in short at a decent price. Here's a picture of gbpchf, the others look similar.

Hi Hugh,

This is an awesome thread so far, thanks for sharing your time.
For me Just using PA alone doesn't work. To much ambiguity around what I was supposed to be "looking at'.
A lot of traders out there dismiss indicators, as they are "lagging", but quietly Ive found looking at HA Candles and the Stoch helps to frame up what im looking at, helping me to better understand which way the market is moving. Ive found using trendlines helps also.

On your last post, the Stoch setting was 8,3,8...is there a reason for this? as Im following along, learning as I go.

Cheers

SR

Hi, thanks for your positive comments. PA alone is fine and I did use ordinary candles for a long time but I just prefer Heiken Ashi. Yes all indicators definitely do lag but they are ok to use as long as you understand what they are supposed to be telling you. I find stochs one of the better indicators because once you are used to using them they give you information about the trend and the strength of pullbacks within the trend. A good smooth pullback often leads to a good smooth impulse wave.

As for the settings I have been looking into what actually changes when you change them and I find using 8,3,8 makes them appear smoother. I can't find a %K setting I like better than 8. 3 for the sma works fine. I have been using 8 for the smoothing recently and changed the method to close/close and I prefer the smoother look. Also try 6 and see if you prefer that. I think it's a personal preference thing and having an understanding of what the indicator does and doesn't do.

Notice also that rather than take entries straight away these days I am putting pending orders below the days low to reduce the stop loss required. The price will get me into the trade only when it starts moving in my direction. Also I have been looking at shorter timeframes for some entries recently such as hourly. The way I see it is that any method you can use to get you into a trade more safely or easily is a good thing.

Thanks for reading the thread and hope to see you again soon.

Hey Hugh
I am glad you are back....was disapointed when I didn't see you for a while....forgot about the summer months slow!!!!
Blessings
Tony

Hi Tony, I was around but not much was happening. It's time to bank some pips!