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Swing trading with heiken ashi and stochs

  • #2,681
  • Jul 7, 2013 7:31pm Jul 7, 2013 7:31pm
Where there is a nice pullback with smooth stochs but the entry is quite far from the 100sma, this is what I do:

I setup a 2xATR SL. If the SL just a bit below the previous pullback highest point, I use about 2.5ATR so that the stop is located right at the previous high point. If it goes past that point, I want to be taken out the trade as it would be a higher high.

Since the 100sma can take a very long time before starting to trail the stop, in the case it goes in my direction by about 150/200 pips (that number actually depends on the pair traded of course), I move the stop to BE and then let it run normally.

Update on the trades taken since June 25th: 5 trades, all in the green, for about 1000pips of floating profit so far. I know I don't have the same candles as yours Hugh but here are my entry points:

EURUSD: Short @ 1.3078 on June 25th.
GBPUSD: Short @ 1.5419 on June 25th.
USDCAD: Long @ 1.0539 on July 2nd.
USDCHF: Long @ 0.9485 on July 2nd.
USDJPY: Long @ 100.03 on July 3rd.

The last 2 were pretty bad entries. I am still trying to understand why i took the trades.
Being really exposed to USD, I moved the 2 early positions to BE last week. Maybe closing the 2 poor trades early would have been a better decision to take?

Cheers
  • #2,682
  • Jul 7, 2013 11:56pm Jul 7, 2013 11:56pm
Quoting veyron
Where there is a nice pullback with smooth stochs but the entry is quite far from the 100sma, this is what I do: I setup a 2xATR SL. If the SL just a bit below the previous pullback highest point, I use about 2.5ATR so that the stop is located right at the previous high point. If it goes past that point, I want to be taken out the trade as it would be a higher high. Since the 100sma can take a very long time before starting to trail the stop, in the case it goes in my direction by about 150/200 pips (that number actually depends on the pair traded...
They all look like pretty good entries to me and the goal is to make a profit which you are doing.

The entry is the least important part of trading although it is the part that people worry about the most. If you are using support and resistance in the direction of a trend, cutting your losses short and letting your winners run then you are going to make money in the long run. It IS that simple.

One thing about 2/2.5 ATR stops. Don't be afraid to use tighter stops than that. If I see something finding support at a 100 level I'll often put the stop 15 or 20 pips below that level. If the price drops below and takes me out it's not going to hurt me at all but if the trend carries it upwards I'm in a potential 1000 pip trade for a 20 to 30 pip risk.
  • #2,683
  • Jul 8, 2013 2:52am Jul 8, 2013 2:52am
Really appreciate your feedback/comments on this Hugh.
I am trying to integrate the 100 levels as much as I can when I enter a trade. I've really been learning a lot by following your thread.
  • #2,684
  • Jul 8, 2013 4:11am Jul 8, 2013 4:11am
Quoting veyron
Really appreciate your feedback/comments on this Hugh. I am trying to integrate the 100 levels as much as I can when I enter a trade. I've really been learning a lot by following your thread.
Glad to hear it :-)

50 levels can be used as well.
  • #2,685
  • Jul 11, 2013 10:49am Jul 11, 2013 10:49am
Hugh and Veyron,

it looks like the USDCHF is turning back upward on the H4 to resume its trend today. Any thoughts on a Long entry here? Patience is my worst quality, and it appears a very necessary trait to possess with this method of trading. I'm determined to get this...

thanks,

Bry
  • #2,686
  • Jul 11, 2013 4:21pm Jul 11, 2013 4:21pm
Quoting Traderbry
Hugh and Veyron, it looks like the USDCHF is turning back upward on the H4 to resume its trend today. Any thoughts on a Long entry here? Patience is my worst quality, and it appears a very necessary trait to possess with this method of trading. I'm determined to get this... thanks, Bry
I like the look of UsdChf long but you are right, you need to wait for a good signal.
  • #2,687
  • Jul 11, 2013 7:31pm Jul 11, 2013 7:31pm
HB,

Correct me if I'm wrong, but you began this strategy with the 4-hour chart by itself, then revised it to a Daily/Hourly MTF method. What about the Daily/Hourly approach made you switch back to the 4-hour single chart strategy? Just wondering... If there is a post number you can refer me to that answers this, feel free to either insert a link or just tell me the number. I wouldn't want to cause you to repeat yourself on my account...

thanks.
  • #2,688
  • Jul 11, 2013 8:13pm Jul 11, 2013 8:13pm
Hi

I personally trade the Weekly/4H. not sure if I missed anything from the thread but I think that's what Hugh is still doing as well. If you look couple pages back in the thread, Hugh was still posting an update every saturday or sunday with mentions of the pairs that turned on the weekly and that he should start following on the 4h.

Another thing: according to the system rules, I started to follow a lot of pairs during the past 2 weeks. Right now, I am considering switching back to the weekly for 3 of these pairs. They have turned back badly on the 4 hourly and it might not be safe to take entries. unfortunately I don't have the details here as I am trading them on another laptop.

I'll post a complete list of pairs I follow this weekend with the details of the new pairs to follow (if any) and the ones I stop following.
  • #2,689
  • Jul 11, 2013 10:48pm Jul 11, 2013 10:48pm
Quoting veyron
Hi I personally trade the Weekly/4H. not sure if I missed anything from the thread but I think that's what Hugh is still doing as well. If you look couple pages back in the thread, Hugh was still posting an update every saturday or sunday with mentions of the pairs that turned on the weekly and that he should start following on the 4h. Another thing: according to the system rules, I started to follow a lot of pairs during the past 2 weeks. Right now, I am considering switching back to the weekly for 3 of these pairs. They have turned back badly...
Thanks Veyron,

now that you mention in, I do remember the Weekly chart being referenced in the rules - but I didn't recall it being used so regularly. It makes sense, but with the Weekly taking so long to change (it is weekly after all), it would seem that a lot of time can go by between trades. But I would be ok with that, if the trades are winners and running...
  • #2,690
  • Jul 11, 2013 10:50pm Jul 11, 2013 10:50pm
It's really hard to watch the markets move while waiting for a weekly reversal HA candle or 2 to finish forming. That's a lot of pips to pass up in the meantime...
  • #2,691
  • Jul 11, 2013 11:28pm Jul 11, 2013 11:28pm
That's not much of a problem. While you are waiting weeks to see a reversal on the weekly and strat following new pairs, you are already trading other pairs on the 4H tf. The idea is to switch to 4H when a new swing starts on the weekly.

then, on the 4h, you trade inner swings in the direction of the trend. every nice and smooth pullback is a potential entry point. Combined with a bit of S&R analysis, you can cherry pick the best entries and let your trades run. When one of your future winner is BE, you can scale in a new trade on the following pullback.

I agree with you that forward testing this system is a long process as you do not trade a lot but it is an extremely simple system to follow that do not require to be in front of your screen 24/7. You place your trades and then forget about them for days, even weeks sometimes.

I have only been forward testing for about a month and will continue doing so for at least 3 more months
  • #2,692
  • Jul 12, 2013 12:03am Jul 12, 2013 12:03am
Thanks for simplifying it for me, V. Now I can't wait for the next reversal on a Weekly chart. :-)
  • #2,693
  • Jul 12, 2013 7:10am Jul 12, 2013 7:10am
Quoting Traderbry
HB, Correct me if I'm wrong, but you began this strategy with the 4-hour chart by itself, then revised it to a Daily/Hourly MTF method. What about the Daily/Hourly approach made you switch back to the 4-hour single chart strategy? Just wondering... If there is a post number you can refer me to that answers this, feel free to either insert a link or just tell me the number. I wouldn't want to cause you to repeat yourself on my account... thanks.
Good Morning all, A few years ago Hugh started a thread useing monthly and daily charts. He had a large following. These are the charts I still use. He had a pdf file on it. Thought I'd mention it! Best to ya.
Enter Signature
  • #2,694
  • Jul 12, 2013 11:54am Jul 12, 2013 11:54am
Traderby, I found it if your interested. See attached.
Attached File(s)
File Type: pdf Swing_Trading_With_Heiken_Ashi_And_Stochs.pdf   84 KB | 6,329 downloads
Enter Signature
  • #2,695
  • Jul 14, 2013 9:51am Jul 14, 2013 9:51am
Quoting poacher
Traderby, I found it if your interested. See attached. {image}
Thanks Poacher, I appreciate it...
  • #2,696
  • Jul 15, 2013 7:34am Jul 15, 2013 7:34am
Quoting poacher
Traderby, I found it if your interested. See attached. {image}
Hey Poacher,

Hugh updated the method recently (in May). I have the updated version, but I don't know how to attach it since I use my iPad when on forex factory...
  • #2,697
  • Jul 15, 2013 4:53pm Jul 15, 2013 4:53pm
Hey traderby, Yes he did and I have it! I thought the old one explained the system with differant time frames better than eds new pdf. and might be of help to ya. Thats all. Best to ya!
Enter Signature
  • #2,698
  • Jul 16, 2013 12:10pm Jul 16, 2013 12:10pm
Quoting Traderbry
It's really hard to watch the markets move while waiting for a weekly reversal HA candle or 2 to finish forming. That's a lot of pips to pass up in the meantime...
You can trade while a weekly signal is in the process of forming provided the 4 hour signals are good and are the right side of the 100 sma. Generally you will get a big push which makes you think you are missing the boat but then you will invariably get a pullback which provides you with an opportunity to jump on the trend and almost always that will be close to the 100 sma so you're really not missing out on anything. Remember that a good 4 hour trend can go anything from 200 to 2000 pips so 50 or so either way at the start is never a big deal. Just relax into the flow of things and forget that you are trying to make money. The pips will come.
  • #2,699
  • Jul 16, 2013 5:01pm Jul 16, 2013 5:01pm
Quoting Hugh Briss
{quote} You can trade while a weekly signal is in the process of forming provided the 4 hour signals are good and are the right side of the 100 sma. Generally you will get a big push which makes you think you are missing the boat but then you will invariably get a pullback which provides you with an opportunity to jump on the trend and almost always that will be close to the 100 sma so you're really not missing out on anything. Remember that a good 4 hour trend can go anything from 200 to 2000 pips so 50 or so either way at the start is never a...
Thank Hugh - I will keep that in mind...
  • #2,700
  • Jul 23, 2013 7:18am Jul 23, 2013 7:18am
Hey guys - does anybody know if a reputable broker with a mobile platform that has HA candles? I currently use ibfx, and theirs doesn't.
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