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Yet another Heiken Ashi system

  • #21
  • Jan 9, 2013 8:14pm Jan 9, 2013 8:14pm
Here is my latest live trade this morning (I'm in the Asian session).

As you can see my AUD/USD trade shoots back to above 20 pips and I have also taken another AUD/JPY and USD/JPY trades. At the time of writing they are rising except for USD/JPY but before this moment they are all in negative territory. But I believe the uptrend is strong enough and I leave them to run uninterrupted. They might be erased a few minutes later but if you wait longer enough (probabilty a few hours or days) you can see a big difference =)

One common mistake that all traders made is that they either close out their trades too early or they were fear because they saw all their profits in negative territory. Heiken Ashi eliminates all fear and emotional trading mindset and this is why I want to share this system with everyone.

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  • #22
  • Jan 9, 2013 9:13pm Jan 9, 2013 9:13pm
hi,

Had 3 trades after reading your thread. On demo of course.
All were AUD pairs and well after the good news from China, AUD jumped!
I had 2 pairs in buy and 1 on sell.
So I am up 2:1 at this moment and even so..all conditions are as you said - still good to go..except for the (Short) losing trade, H4 has HA turned white.
So this is an excellent test to see of it goes back into my favour.
  • #23
  • Jan 9, 2013 9:19pm Jan 9, 2013 9:19pm
Congratulation and thanks for sharing your result with us!

Trading probability is not just only using a system but we can still gather other valuable information such as new events. AUD pairs and especially AUD/USD will keep on rising higher and therefore I'm keen to trade only AUD pairs vs other weaker currencies like the JPY and USD. Hold your position and trail profits if you like.

During a strong uptrend we only focus on BUY signal. And if the H4 HA turns RED, ignore it. Unless you see changes on the D1 or W1 as well. This way we will know H4 is actually undergoing some normal retracement but overall it is positive and the trade is still in our favor.

All the best~
  • #24
  • Jan 9, 2013 11:05pm Jan 9, 2013 11:05pm
Quoting amikaking
Yes, I get you. Regarding to money management, I assume every trader should have their own methods to handle each trade. One reason for me not to use % to measure my risk is that I can often left my trade for a very long period. My experience with this system told me, the longer you stay in the market and as long all Heiken Ashi and Heiken Ashi Smoothed across all 3 TFs (here I'm referring to H4-D1-W1) agree together would have allow you to catch huge market movement during a trending phase. This is what we call "let the market run and do...
You sounds like one of my patient lecturer who taught me materials engineering subject in the university, LOL. Although what you have covered is not completely new to me, there are still some new stuff I can learn from you. It never occur to me that the trailing stop feature in MT4 is functional. I ever tried a few times in the past but it never triggered stop loss. I read from the forum that MT4 trailling stop is not a stable features. Since then I have not used it. Maybe I have mixed up the 4 with the 5 digits, that is the only possibility I can think of.

Last night, I tried to screen the currency pairs based on your critieria and entered a trade for AUDCAD. 10 hrs from now it has a profit of 30 pips or so. It is still doing well. All the 6 T/F are in alignment:

For the M5 TF, the MA200 was below the price which is not shown in the pictures. I will try to use the MT4 trailing stop features and see if it ever get triggered.
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  • #25
  • Edited Jan 10, 2013 1:16am Jan 9, 2013 11:18pm | Edited Jan 10, 2013 1:16am
Quoting patguay
You sounds like one of my patient lecturer who taught me materials engineering subject in the university, LOL. Although what you have covered is not completely new to me, there are still some new stuff I can learn from you. It never occur to me that the trailing stop feature in MT4 is functional. I ever tried a few times in the past but it never triggered stop loss. I read from the forum that MT4 trailling stop is not a stable features. Since then I have not used it. Maybe I have mixed up the 4 with the 5 digits, that is the only possibility I can...
Great job. But as far as I know, AUD/CAD is a pair with large spreads and it is not as volatile as other majors and JPY crosses. I tried this strategy using high volatile pair like GBP/JPY before and it managed to grab 100-200pips after 2 or 3 days. For trailing stops, you can try using other trailing stop EAs that can be found in this forum. But for me it is optional because I don't want to leave my PC running the whole day.

Looking at your screenshot it seems that you are using MTF all the way till M5, which I think is good for market timing but it is not necessarily IMHO. I make all my entries randomly as long as the rules are fulfilled. If you are a lazy trader like me, trade the daily chart. Just leave it there for the market to do its job and set your stop loss and take profit using a higher TF's ATRX1. Doing a visual backtest (make sure you select back the candlestick) you will find that most of the time your SL would not be hit so easily and you will have very very few losers, hence the risk reward ratio is very promising.

I would like to see more results from other people who have tried my strategy. All the best.

**Edit: Instead of making random entries even though when all entry criteria are met, I think the best way would be enter at the open of a new candle at GMT 0:00**
  • #26
  • Jan 9, 2013 11:18pm Jan 9, 2013 11:18pm
Quoting amikaking
Congratulation and thanks for sharing your result with us!

Trading probability is not just only using a system but we can still gather other valuable information such as new events. AUD pairs and especially AUD/USD will keep on rising higher and therefore I'm keen to trade only AUD pairs vs other weaker currencies like the JPY and USD. Hold your position and trail profits if you like.

During a strong uptrend we only focus on BUY signal. And if the H4 HA turns RED, ignore it. Unless you see changes on the D1 or W1 as well. This way we will...
I have just entered AUDJPY long position. Currently, AUD is strengthening against the JPY based on the currency strength meter. Fundamentally, Japan is trying to depreciate JPY to make its export more competitive. The downtrend has been going on for weeks since late last year around Nov period. So it does make sense to short AUDJPY. All the 6 T/F are also in alignment now. I will review the position 9 hrs from now.
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  • #27
  • Jan 9, 2013 11:25pm Jan 9, 2013 11:25pm
Quoting amikaking
Great job. But as far as I know, AUD/CAD is a pair with large spreads and it is not as volatile as other majors and JPY crosses. I tried this strategy using high volatile pair like GBP/JPY before and it managed to grab 100-200pips after 2 or 3 days.

Looking at your screenshot it seems that you are using MTF all the way till M5, which I think is good for market timing but it is not necessarily IMHO. I make all my entries randomly as long as the rules are fulfilled. If you are a lazy trader like me, just leave it there for the market to do its...
You are right to say that AUDCAD is not as volatile as other pairs like GBPJPY but my all time favourite is EURJPY (for JPY pairs). This is the only pairs that meet the criteria 10 hrs ago and I thought there is no harm testing it. As for why I put all the timeframe together is to allow me to have an overall view. If the shorter time frame is in alignment, I will trade either 5 mins or 15 mins. If the longer timeframe is in alignment, I will trade 4 hrs instead. I am also experimenting other trading strategies and this screenshots allow me to get all the relevant information within seconds. The only drawback is that I have to manually drag the currency pairs to the screen 6 times each when I am doing a screen. Well you can't have everything under the sun.

I am still experimenting it, so all suggestions are welcomed. I seldom show to the whole world what is my trading result like but since you are so kind and patient to share what you know to us, I thought I will do my part by showing my trading result based on your trading criteria. You can take it as a feedback as to whether your trading methodology is a good one or not.
  • #28
  • Edited 11:49pm Jan 9, 2013 11:38pm | Edited 11:49pm
Quoting patguay
I have just entered AUDJPY long position. Currently, AUD is strengthening against the JPY based on the currency strength meter. Fundamentally, Japan is trying to depreciate JPY to make its export more competitive. The downtrend has been going on for weeks since late last year around Nov period. So it does make sense to short AUDJPY. All the 6 T/F are also in alignment now. I will review the position 9 hrs from now.
You are right. It's still too early to get excited because in fact JPY has became the weakest currency since November against all weighted currencies. Not only Japan is weakening Yen to benefit its export, but it was PM Abe's monetary policy to cause the Bank of Japan (BoJ) to do so in order to control inflation. All these valuable information can be read from Forex Street News, it is indeed a plus to know this fact so we use them to our advantage and increase winning probability.
  • #29
  • Jan 10, 2013 12:04am Jan 10, 2013 12:04am
Quoting amikaking
You are right. It's still too early to get excited because in fact JPY has became the weakest currency since November against all weighted currencies. Not only Japan is weakening Yen to benefit its export, but it was PM Abe's monetary policy to cause the Bank of Japan (BoJ) to do so in order to control inflation. All these valuable information can be read from Forex Street News, it is indeed a plus to know this fact so we use them to our advantage and increase winning probability.
In the past, BOJ has tried to intervene to depreciate the Yen but they fail on several occasions with their asset purchase, quantitative easing, ......etc. if I still remember it correctly. This time round, it seems pretty different. I am more concern about when the whole world is shorting Yen, the currency go for a nasty reversal and get everyone burn. So it is always good to stay vigilant and monitor your trade closely.

You never know when that day will come but before the event happen, let's just continue to ride the trend.
  • #30
  • Edited 12:53am Jan 10, 2013 12:41am | Edited 12:53am
It seems like there are a lot of currency pairs fulfiling the trading criteria. I have just enter my 2nd long position with AUDUSD and within minutes I have made profits. Those 3 profits highlighted in oval on the right hand side of the 2nd picture is the trade that I enter for the past 11 hrs: AUDCAD, AUDJPY, AUDUSD.
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  • #31
  • Jan 10, 2013 1:47am Jan 10, 2013 1:47am
Does anyone monitor NZDUSD and NZDJPY now? It looks good to me. It has strengthened for the past 3 hrs against JPY and USD.
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  • #32
  • Jan 10, 2013 1:57am Jan 10, 2013 1:57am
Nope. I am only focusing on AUD/JPY and USD/JPY. If you think it is a good deal, take the offer. At this moment I will trade only H1-H4-D1 combination.
  • #33
  • Edited 2:24am Jan 10, 2013 2:12am | Edited 2:24am
Quoting amikaking
Nope. I am only focusing on AUD/JPY and USD/JPY. If you think it is a good deal, take the offer. At this moment I will trade only H1-H4-D1 combination.
I have a question. I notice that the HA smoothed indicators for weekly T/F has been in the uptrend for a prolong period of time. There are days when the Daily T/F are in the downtrend as shown in the highlighted circle in the Daily and Weekly chart below. I am wondering if we can trade based on 15 mins/H1/H4 or H1/H4/Daily, something like a counter trend trading, depending on what timeframe you are looking at the overall trend.

As for the entry criteria, enter short position each time the lowest timeframe chart HA smoothed changed from blue to red (and vice versa if you trade long position). It allows you to add on to your winning position until either you get stop out or the higher timeframe has changed to the opposite colour. Does anyone tried this method before? I know that there are a lot of traders trying this method for the basket trading threads but they mainly used it for lower timeframe such as 5 mins, 15 mins, 60 mins, ......etc. This is one way to further optimized your profits while riding on the trend or trade against the overall trend (here I mean the weekly and daily).

Sorry if I have side tracked the topic. Just in case some traders only trade certain currency pairs, I am suggesting that you can still trade using this strategy but instead of using weekly, you can use Daily or H4 for the highest timeframe trend for reference.

PS: I will delete this post if some of you are confused by what I said or amikaking does not feel comfortable with my idea. It is not my intention to mess with amikaking's thread who has done a wonderful job in explaining the trading concept. I am just suggesting an alternative to trade using this trading methodology but the bottomline is that the 3 time frame still aligned in the same direction.
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  • #34
  • Edited 5:41am Jan 10, 2013 3:30am | Edited 5:41am
Quoting patguay
I have a question. I notice that the HA smoothed indicators for weekly T/F has been in the uptrend for a prolong period of time. There are days when the Daily T/F are in the downtrend as shown in the highlighted circle in the Daily and Weekly chart below. I am wondering if we can trade based on 15 mins/H1/H4 or H1/H4/Daily, something like a counter trend trading, depending on what timeframe you are looking at the overall trend.

As for the entry criteria, enter short position each time the lowest timeframe chart HA smoothed changed from blue to...
Of course you can, and this would be call swing trading. It is possible to trade this way if you are trading high volatile market using a higher timeframe basis (H4-D1-W1). Personally I would not do so because trading against the trend can be very risky and dangerous if suddenly the market spikes after a news event.

Do not forget that HA candles are lagging indicators, if suddenly the major trend (eg:uptrend) turns against you and the price rallies rapidly, you could have well lost many pips if you insist to wait until the HA candle to turn back to white before closing your sell trade. The drawdown would cost you dearly if you trade a larger TF in a losing position. The situation is totally opposite if you are following the trend using HA. It could be late for you to enter the market, but it could save you more than you could think if there are fakeouts and retracements. It also let you to ride on the trend longer because it totally ignores market noises and consolidation too.

Like what I have said on my first post, if there is no signal, either you wait, look for signals from other pairs or you stay out. If you missed the first train then you should wait for the next train. Plain and simple concept, but it is very difficult for us to obey. The best way not to lose money is not to trade at all if you have no good reason.
  • #35
  • Jan 10, 2013 3:41am Jan 10, 2013 3:41am
Quoting amikaking
Just like when you are using any system, the best way is to enter upon the closed of the candle. This is considered safe once the candle has closed because HA would not repaint
Thanks a lot amikaking
  • #36
  • Edited 6:48am Jan 10, 2013 6:22am | Edited 6:48am
Here is an experiment I'm doing today with my real live account, risking a total of $30 + $30=$60 out of my $130 mini account for two trades.

To increase my winning probability, I added KG's Currency Strength Index onto my weekly chart and found that AUD and NZD are currently the strongest currency pairs while JPY is obviously the weakest. Therefore I will be long AUD/JPY and NZD/JPY respectively. I made two random long entries when I saw all entry criteria are met on H4-D1-W1 TFs.

I used the current ATR value on daily chart to input my SL for both trades, and I set my TP to the nearest round number so they are more likely to get hit.

To sum up, my total SL is 190 pips, TP is 140 pips, risking $60 to take a reward of $52 (not including spreads). I decide that I will leave the market to finish it job and let's see what will going to happen tomorrow. Wish me good luck!

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  • #37
  • Jan 10, 2013 6:37am Jan 10, 2013 6:37am
AmikaKing,

Interesting thread. I've placed a few demo trades and they're all in profit. Hard to lose right now on the JPY crosses as long as you're short Yen.

Seems like this would be an easy strategy to code into an EA (for coders anyway). Have you thought of that. If you really are a 'lazy trader'...like me ... that would be the way to go.

Pataguay:
You mentioned the MT4 trailing stop. You may be having troubles because it does not kick in until you hit breakeven. So if your trail is 30 pips and your trade moves to +25 then reverses, it won't close until your original s/l is hit (-30 or whatever you set). Don't know if that's where your problem may have stemmed from.
  • #38
  • Jan 10, 2013 6:56am Jan 10, 2013 6:56am
Quoting spyderman
AmikaKing,

Interesting thread. I've placed a few demo trades and they're all in profit. Hard to lose right now on the JPY crosses as long as you're short Yen.

Seems like this would be an easy strategy to code into an EA (for coders anyway). Have you thought of that. If you really are a 'lazy trader'...like me ... that would be the way to go.

Pataguay:
You mentioned the MT4 trailing stop. You may be having troubles because it does not kick in until you hit breakeven. So if your trail is 30 pips and your trade moves to...
Hey thanks for taking your precious time reading my thread. It's not really easy to have senior trader here.

I have been thinking about EA long time ago, but since this system requires only little maintanence and setup, I think an EA is not neccessary. If anyone can come out with an EA it will be great as well.

All I am trying to show everyone is the power of trading probabilities. Once set, be fully confident even if it is a loser.
  • #39
  • Jan 10, 2013 8:02am Jan 10, 2013 8:02am
Where an EA would help is in monitoring more pairs. Imagine 28 pairs. Checking 3 tf's for a signal. Then managing all the trades.

Maybe some of the guys over at Steve Hopwoods site would take up the challenge. I won't muddy up your thread in the mean time.

Good success to you.
  • #40
  • Jan 10, 2013 8:45am Jan 10, 2013 8:45am
Hi,

Pretty good first test.
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