Bollinger band trading with MAs

Here’s an excerpt from investopedia

* Hollow candles with no lower "shadows" indicate a strong uptrend: let your profits ride!
* Hollow candles signify an uptrend: you might want to add to your long position, and exit short positions.
* One candle with a small body surrounded by upper and lower shadows indicates a trend change: risk-loving traders might buy or sell here, while others will wait for confirmation before going short or long.
* Filled candles indicate a downtrend: you might want to add to your short position, and exit long positions.
* Filled candles with no higher shadows identify a strong downtrend: stay short until there's a change in trend.

These signals show that locating trends or opportunities becomes a lot easier with this system. The trends are not interrupted by false signals as often, and are thus more easily spotted. Furthermore, opportunities to buy during times of consolidation are also apparent.

Maybe some of these explanations from other sites will help. I’d post links but I don’t think I’m allowed to. :frowning:

The suggestion is that with a change of colour of the Heikin Ashi candle, the trend has changed which I figured sort of fits in with your candle changing colour element on the counter trend strategy

[B]From investopedia[/B]

Constructing the Chart
The Heikin-Ashi chart is constructed like a regular candlestick chart (except with the new values above). The time series is defined by the user–depending on the type of chart desired (daily, hourly, etc.). The down days are represented by filled bars, while the up days are represented by empty bars. Finally, all of the same candlestick patterns apply.

Putting It to Use
These charts can be applied to many markets; however, they are most often used in the equity and commodity markets. Traders often program these new instructions into existing trading programs, such as MetaTrader, or use many online tools (listed in the reference section below). Finally, it can be applied via Microsoft Excel or other similar spreadsheet programs.

There are five primary signals that identify trends and buying opportunities:

* Hollow candles with no lower "shadows" indicate a strong uptrend: let your profits ride!
* Hollow candles signify an uptrend: you might want to add to your long position, and exit short positions.
* One candle with a small body surrounded by upper and lower shadows indicates a trend change: risk-loving traders might buy or sell here, while others will wait for confirmation before going short or long.
* Filled candles indicate a downtrend: you might want to add to your short position, and exit long positions.
* Filled candles with no higher shadows identify a strong downtrend: stay short until there's a change in trend.

These signals show that locating trends or opportunities becomes a lot easier with this system. The trends are not interrupted by false signals as often, and are thus more easily spotted. Furthermore, opportunities to buy during times of consolidation are also apparent.

[B]From Forexoma:[/B]

the Heikin-Ashi chart is delayed and the candlestick chart is much faster and helps us to make more profit. So why should we use a Heikin-Ashi chart? As I have already explained, because of the delay that the Heikin-Ashi chart has, it has less number of false signals and prevent us from trading against the market. On the other hand, Heikin-Ashi candles are easier to read because in contrast with the candlesticks they don�t have a lot of different shapes and formations.

Different candles in a Heikin-Ashi chart:

1- Bullish candles:

When the market is Bullish, Heikin-Ashi candles have big bodies and long upper shadows but no lower shadow. Look at the big uptrend in the below chart. As you see almost all of the candles have big bodies, long upper shadows and no lower shadow.

2- Bearish candles:

When the market is Bearish, Heikin-Ashi candles have big bodies and long lower shadows but no upper shadow. Look at the big downtrend in the below chart. As you see almost all of the candles have big bodies, long lower shadows and no upper shadow.

3- Reversal candles:

Reversal candles in the Heikin-Ashi charts look like Doji candlesticks. They have no or very small bodies but long upper and lower shadows.

How can you use the Heikin-Ashi chart in your trades?

I know that some traders only use Heikin-Ashi to trade but I don�t agree with it. As you saw Heikin-Ashi is delayed. So it is good for trading volatile currency pairs like GBP-JPY and with small time frames. It is good for intraday trading and scalping using small time frames like 5 minutes or 2 minutes. It is not suitable for big time frames like daily and 4 hours because you will be too late in many cases and so you have to close your trade before you make any profit.

TALOND

Mike this FX ‘thingie’ sounds so easy when its explained like that. I’m off to IBFX directly! :D:D:D Got to love ‘Investopedia’.

RED EAR

Thanks for taking the time to post that detailed account. Was taking it all in right up to the part where its suggested its good for 2-5 m charts. Bugger… thats me out then. :smiley:

if only it were that easy!

hey, what do you think of a buy right now, I’m hesitant to trade this time of night, it’s too slow but looks like things are pointed up?

TALOND

Hi Mike, I’ve been riding the 15m chart since the ma turned up at 1.6566 (unusual for me to take a trade outside of London open - New York close).

Hmmmm… on another thread you mention the ‘yellow brick road’. Don’t know its reached the outer limit on that. If it breaks, it might be good for 1.664?

so you cought that jump up that lasted all of about a minute or two! I got in just above that. 1.664? I think I see where you’re getting that. Think we should stay long till that area?

TALOND

Hi Mike. You know it. I trade the ma! :slight_smile: Don’t care what price is doing… not about to change now. Sure it dipped but ma was unafected. Now up around 30 pips and still looking strong. I’ll follow the ‘yellow’ err nope red and green ma and see if it leads to the Emerald Palace. :smiley:

Wowsers - think thats just about finished me off! :(:smiley:

Hanging in there with you. What would you recomend as a reasonable stop loss ? I’ve got 40pips set

best to watch 1h or 15m on this one?

RED EAR

Hehe, I like that :smiley:

No seriously, it takes out the candlesticks altogether. I’m not saying its the chart you should use :slight_smile: Although I do keep one open along side the candlesticks just for clarity. Price forms a clear ‘v’ shape above or below the ma indicating possible overbought or sold signals. :smiley: Just another indicator.

TALOND

Dont know where youve entered? :slight_smile: But if price breaks below 1.661 bail out! :smiley:

I was late getting in as usual, 1.6603
but just moved my stop up above break even.

I bailed out with at little profit… now what?

Well were well and truely into the Asian. Good luck guys. I still see an upside to tonight? I’m out. :slight_smile:

TALOND

Over to you. Its your call and time. I’m going to bed! :smiley: Its 02:42 here! Got a case of severe ‘red eye’ :slight_smile: I’ve bailed out. But Asian is a law unto its own. Looks at present like a restbite, but could turn over on the ma’s? :smiley:

well London’s open are you up yet R. ?

4hr trend is up, anyone buying into the bounce of the 13SMA and middle bollinger on the 1hr chart?

LOL - so much for that idea!!!
GU dropped like a sack of &*#1

SANMIGUEL

MA on the 15m and 1h was pointing down before that spectacular fall… nice thats my trade for today. :slight_smile:

TALOND

I see Asian hit 1.665 last night on the 1h candle wicks and 1.664 on the candle bodies. :smiley:

Good trading everyone.

so is it too late to trade today? is it all over with? Missed it again. yeah made some pips in the Asian last night then screwed around and lost it all and called myself following the MAs. woke up in the middle of the night about 8:00 gmt time. MAs were crossing up so I went long for a few pips. but missed the big drop.

What MAs are you using now? I had the 2 & 4, 7 & 14 would have worked better.