Swing trading with heiken ashi and stochs

Not exactly HB, but just the same...

Ok, here's another chart giving a picture of what I am looking for. I've chosen this chart because it gives an example of a good winning trade and a choppy, borderline trade.

I've put the red vertical lines a few candles either side of the parts I want to look at so as to not cover over the candles I want to talk about.

Let's start with the best bit, the trade from C to D.

From line C you can see the daily stochs oversold, crossed at the bottom and slowly starting to rise. Also the 4 hour stochs are oversold, crossed and rising. Next the daily heiken ashi turns green. Then a candle closes above the round number s/r level at 1.28 adding up to being a pretty clear buy signal. Remember, always buy at support and sell at resistance.

The trade continued nice and smoothly until just before line D where we get a nice exit signal with a red heiken ashi on the 4 hour chart. If we could just take trades like this all the time life would be so much simpler. Of course it's not always that straightforward.

If you look at the area between lines A and B we can see a similar set of signals and yet the price does not move smoothly it just chops about but with a downwards bias. That's not to say that you would have lost money trading it but it would have not been as smooth a trading period. I believe that with enough chart time you should be able to spot the difference between the two setups. There was more volatility around the start of the move down at point A and the daily stochs were not fully overbought before the move down. That move down never really gave a nice signal as in price closing just below resistance allowing you a good entry into the trend. As well the 4 hour stochs never gave a particularly smooth entry after the first signal. All in all I believe there were enough clues there to dissuade you from trading that move.

This is not an exact science and although I believe this system will make you pips long term you will have to do some thinking for yourself in order to make this work for you. I recommend you spend as much time as you possibly can going back through old charts and training your eye to spot good setups and bad ones so that when the right hand side of the chart looks good you are there and confident in your trade.

I'll try and post some more charts like this soon.

Hugh this looks fantastic - I look forward to loading up and examining about ten hours worth of back data this weekend...... I mean I plan on spending 10 hours in the LAB ... bet I look at 20X that amount of hours...

Thank you so much -

No worries, really good idea to get some chart time in on a Sunday.

I've been playing around with this idea a bit more. I tried putting a 100 sma on the h4 chart and a 100 sma from the daily chart on the h4 chart using a MTF ma indicator. I'm not sure if this helps or not? I also tried putting a daily 100 and 200 sma on the 4 hour chart. To be honest a lot of the countertrend moves are good trades as long as the daily and 4 hour momentum are both moving in the same direction. I'll keep thinking it over and post if I come up with anything worth mentioning.

I call it paying my dues....

Hmm, it'll take more than 10 hours but keep going, it gets easier.

One bad thing about using mtf indicators is that they don't work on the simulator. A really good idea is to use the simulator with the 4 hour chart as is and just take every clean stoch swing that corresponds with a ha change and see how much you make. Make sure to buy at support and sell at resistance. If you can more or less break even doing that then imagine what you can do with the daily momentum added.

Here are a few pairs I'll be watching early next week. First is usdchf, looks interesting. I'll be watching what happens at the 0.9050 level. The daily stochs are low and the 4 hour stochs are moving down so maybe there could be a long trade here?

Usdjpy looks obvious for a short but who knows what the BOJ has in mind?

eurgbp looks due a pullback, maybe to 0.8250?

Euraud looks lovely on daily, just need a pullback on 4 hour.

That about covers it for now, all jpy crosses look good to sell but still worried about the BOJ. Chf crosses worth looking at and anything aud seems to look similar in NZD. Gbp pairs are all a bit overextended at the moment and look best left. Let's see how the week starts and I'll post if anything looks nice on Monday morning.

Thanks Hugh,great work and much appreciated by all. I don't quite have a handle on this latest but it's all there for the studying. Will start to absorb all of this as soon as I finish typing. Many thanks again, p.

No simulator.... just eyeballs.... And I have been at this for about 2 years, I figure if I study for two more I will have my forex PHD... LOL

Well I'm on 4 years but noone gave me so much as a gold star yet! lol

A trader pm'd me to suggest using the 200 sma and I like the idea so I'm going to put a 200 sma on the 4 hour chart and also the daily 200 sma on the 4 hour chart using the MTF ma above. This is for general trend direction but also s/r. I'll have to spend some time trading with all this to get a picture of whether it improves things or not. I'll update as and when.

Some trade examples will help a lot. Stick with it, I think this is going to be gold.

If you've never used the simulator I seriously suggest you do. Just type simulator into the search box at the top of the page, I use the first one listed.

Here's an interesting look at eurusd.

Downloaded and installed all the files except the Ea for the time being. All of my charts have USDCHF Trailing Stop is ON, written in the upper left section of the screen.
What am I missing?
Thanks