Heiken Aishi Gann Hi-Low System

Trading Systems Free Forex Trading Systems
1

Hi Everyone,

I am newbie still in the learning process for forex. I have come up with a slightly modified version of the system posted by topchess, which is titled: This is not a Holy Grail (Simple Method). I can’t post a link as I don’t have enough posts.

Not sure if anyone else has posted this system here before. If so I would appreciate it if someone could send me the link to that forum. Either way, I would appreciate some feedback from you guys as to what you think about the functionality of this system.

Here is the basic setup:

Indicators Needed:

  1. Heiken Ashi Candles
  2. Gann Hi-Low Dots (standard setting)
  3. Gann Hi-Low Activator (standard setting)
  4. Simple Moving Average (1 period)
  5. ADX +DI,-DI (standard setting)

The System:

For now will be using the 15 minute chart.

Buy:

  1. Heiken Ashi is Blue
  2. Gann Hi-Low Dots is below candle
  3. SMA is above Gann Hi-Low Activator
  4. +DI above -DI

Sell:

  1. Heiken Ashi is Red
  2. Gann Hi-Low Dots is above candle
  3. SMA is below Gann Hi-Low Activator
  4. -DI above +DI

Exit:

  1. Stop Loss can be place above recent high or below recent low.
  2. Can simply exit when Gann Hi-Low Dots switch directions.

Here is sample chart:

sample.jpg700×419 53.2 KB

I currently have not started to trade as I am still in the process of learning. So I haven’t tested this system which is why I would appreciate any and all feedback.

Thanks!!!

2

Hello rb619.

Thanks for sharing.

I personally found your honesty to announce that you are still learning refreshing when most posters on a public forum would rather pretend to be someone they are not. In return, perhaps I could shed some further light on your path if you are positively open to feedbacks.

All traders go through the phase of moving averages or some type of trend confirmation coupled with an oscillator. ADX is an oscillator. Traders place MAs, trend confirmation indicators, oscillators on their charts because it shows them what they wish to see, “i could have entered there, exited here, profited here, small loss here, large win here, another win there”.

And all this adds excitement for the new trader because the mind chooses what they wish to see and at any traders learning stage, mind usually choose only to see the $$$$.

Such phase can last a long time for some. Some finally snap out of it, some never do. They continuously move from one set of indicator/method/system to the next not realizing all their effort is misaligned.

Your described method is a very stressful road to take. But you might say, “as long as I make the BIG dollars I can take stress!” Once again you are only seeing the $$$$$$$. Please don’t get me wrong, trading is not easy and there are times I feel strained but the stress I am referring to is different and it is caused by the structure of your method.

Once you start demo trading your method (I recommend that you jump into a live account with a very small amount, $500) you will notice things that you will be thoroughly surprised with your method. You are surprised because you found that you have overlooked so many things which is now starting to show in live trading.

I can bet that one of them will be the range of the moves that you ‘think’ you saw on the backtest. A long string of red/blue candles that you believe to happen frequently actually happens infrequently but on top of that it only works out to be 30-50 pips. And you have spent hours/days and few losses already just to arrive at that point only to find that ‘good’ move doesnt even cover half of your losses let alone your efforts.

Chances are you will blow your $500 but consider that as a cost for a great lesson.

Hopefully you do not go back to the drawing board and pull out new set of indicators in preparation for your 2nd live account.

If you do go pass this ‘phase’ (and I hope you do) that I keep referring to, you will notice that trading is all about entering the market and surviving long enough till the big money (banks, funds) move the price to your favored direction. Your exit should be some type of long term trailing or even time based exits because there is a direct correlation between length of time position held vs potential profit levels.

I have been trading for quiet some time. I was shown the ropes years ago and was thoroughly surprised to find that it was so much simpler than I first imagined. Remember profitable trading existed before computers was invented, ever wonder how those traders (e.g Jessie Livermore) managed to profit? Their method is still profitable and have stood against the test of time. Don’t get creative but look for tried and true methods.

Lex

3

Thanks for your insight Lex. I appreciate you taking the time to provide me with critical feedback. I also understand that this might not be the best method but at this point I am just trying to develop a system that I can feel comfortable implementing.

I was hoping you could shed some more light as to how I should go about to develop a trading strategy. You said that “trading is all about entering the market and surviving long enough till the big money (banks, funds) move the price to your favored direction”. How do you determine when to enter the market and when the big boys are going to enter?

Also what would your recommendation be as to what I should focus on when developing trading strategies? Since I am just starting out, I would like to focus on minimizing my losses and preserving my capital long enough to gain the experience and confidence to trade successfully. But I am open to any and all suggestions that can help me develop my trading and trading strategies.

Thanks!!!

4

Hi rb619,

I love Rey Mysterio too :stuck_out_tongue: …

Can i know how do i bring 1. Gann Hi-Low Dots 2. Gann Hi-Low Activator to my charts. I use MT4 platform only.

Thanks.

5

I have tried trading Heiken Ashi by itself and also Gann Hi Lo by itself. It never occurred to me to combine the two. But I can’t imagine how combining two losing strategies can produce a winner. The problem with HA is when the market is consolidating and trading sideways. HA will put you into one losing trade after another and since the market spends most of its time consolidating, you can never make up the losses with the winners from the big moves. Another thing about HA - most traders who claim its a winner, will only trade the 4H and higher time frame to try to avoid the whipsaws I mentioned. They say it is a winner on the these TF, but of course, claims like this are always made and can’t be relied upon until you have proven it to yourself.

I can’t remember the problem with Gann Hi Lo as I only tried it briefly and gave up. I think the problem is that most Hi Lo indicators repaint the last bar or two, so that it never works on live data, but looks great on dead charts. Perhaps somebody with more experience using this indicator can comment. But the thing I have noticed about the Hi Lo indicator, is that relative to HA very few traders try using it which I take as confirmation that it is not worth using.

6

The largest move are made by the ‘sure moneys’. They have inside information, know news content before release and all other advantages. This is followed by funds and the elite traders. We, retail traders are after all this.

So, to answer your question, unless you start working for an international bank or a government institution you will not be at the top tier of the game. This has both its advantage and disadvantage. The disadvantages for us are obviously clear, but the main advantage we have over them is that we have a chance to take some of their huge money with whatever risk/stress we place on ourselves. We can open, close trades, wait for right moments and even hold onto positions forever at a risk parameter we design for ourselves. Traders at the bank cannot do any of these. They move money as per fundamental reasons; promote export/import, curb inflation and so on.

What I am trying to say is that while the small retail traders like us continue to fight each other over for the next 20-30 pip opportunities on the smaller time frames like 15min, 1hr. There comes a moment when the sure moneys will move in and clear the fighting arena. When this happens you are either caught dead on a stop loss or have luckily caught this great move to your favor. What usually happens next is that the trader will close that position out for a profit and feel proud at the above average win but the greatest potential for that position hasn’t even been met yet.

No one knows when the sure moneys will move (unless you are part of/work for the top tier; banks, funds). Bank of Japan intervention is an ongoing clear ‘sure money’. Read into it and witness it one day when the yen moves 150+ pips across the whole board in less than 15minutes or even less.

At this stage of your trading career, all this information will feel irrelevant. But what I am trying to say is that nit picking other traders pocket for measly 10-15 pip is not what professional trading is all about. Professional traders hardly do any intraday trading. Its about capturing those huge moves that happen over days and weeks. You will find the potential profit levels are far greater on long term than any short term trading method.

New traders seem to shun at the words of ‘long term trading’ but what they don’t know is that long term trading provides the best r:r, least stress, and potentially larger profits. But they want the action now, today, everyday.

There is so much more to say but I also know that for now there is unfortunately nothing more I could say.

Lex

7

Thanks for your insight guys!!!

From what I am gathering, it seems best for new traders to focus on longer time frames as opposed to shorter ones in order to avoid whipsaws and higher volatility produced by those shorter time frames. I was thinking of, perhaps, combining the Heiken Ashi with regular candles on two separate charts to see momentum combined with normal price action. I am thinking that this combination can help prevent whipsaws while staying in trends longer as we can use the regular candles and chart formations to identify proper entries while using Heiken Ashi as confirmations and to ride trends out.

As for riding on the coattails of big money, I am not quite sure how exactly to do that at this point besides staying in tune with the news and trying to identify big moves or breakouts in the market. But I will keep what you said in mind, Lex, and research and observe Bank of Japan and its immediate influence over the movement of the Yen.

If anyone else has any other ideas or a better way to implement Heiken Ashi, I would love to hear your thoughts.

8

Hey Rahul,

I am glad you like Rey Mysterio :slight_smile:

Unfortunately I can’t post any links since I don’t have enough posts and I am unable to upload my indicators either. But if you do a google search for “Gann Hi-lo Activator SSL”, you should be able to find it pretty easily.

Also if you go to page six of the thread started by topchess called “This is not a Holy Grail (Simple Method)”, you will find the other indicator I used.

9

This system will be best in the trending markets but i suggest you to use a higher time frame otherwise broker’s spread would kill your account.

10

What time frames would you recommend JJ? Also do you have any experience with heiken ashi?

11

Id have to agree with LexKim that you cant allways believe what posters say I supose we could have a rough idea by the amount of posts theyve made. With regard to the ADX +D1 -D1 cross I noticed an experienced trader has said while the ADX itself is worthwhile trading the +D1/-D1 cross is the road to the poor house,it would be interesting to see what more experienced traders think.

12

Hi CodeMeister do you think Heiken ashi candles are a waste of time?I found them the other day they seem to give a lot of false signals I thought.

14

Hey Buster,

I agree with your statement about the +Di/-Di crossing being unreliable. But in the system I posted, they are not used for entries or exist but only as secondary confirmations in the sense that you only enter long when +DI is above -DI or short when -DI is above +DI and not when they cross.

As for Heiken Ashi, from what I have researched, they seem to be very promising. However, like you said, they give a lot of false signals since they don’t show pure price action which is why they can’t be used alone. But they do a good job of showing the momentum of a trend which is why I think a system with some sort of Heiken Ashi combination can be a good one.

15

I certainly wouldent dismiss your system rb619 its great you shared it with us,as traders we need all the help we can get especially me,thanks for that:8:

16

No problem Buster :),

Like I said earlier, I am open to any and all suggestions. I am a newbie as well and the way I look at it the system is a work in progress. So if anyone can provide suggestions to improve upon it or simplify it, I am more than open to them.

I believe that it is a good idea for new traders and experienced ones alike to share ideas as I believe that we can work together to help each other become successful.

17

Yes i have a little experience with Heikin ashi and a very good experience with Gann-Hilo activator.Basically Gann-Hilo activator is the moving average of highs of x candlesticks in a downtrend(thus providing resistance for the price) and the moving average of lows of candlestick for the x number of candlestick where x is the variable which is set as a period of Gann-Hilo activator.Gann-Hilo activator works best in the trending market but when it comes to giving whipsaws in consolidation it can cause a large number of fake outs losing your confidence but i recommend you sticking with the trend and your rules,no matter what happens.Heikin-Ashi candlestick were also made for the trend traders and they are very useful to remove the noise from the market and thus giving you a better confidence to stick with your system.I would recommend 30M or 1H time frame to use this system and make sure that you have adjusted it’s period already according to your trading style.

18

Yes dead right good luck on our journeys;)

19

Hello

I dont mean to step on anyone’s toes here but if anyone reading care for some direct feedback.

Professionals of the field do not mingle with others in a public forum. They network separately in real world and not on internet. They know that they wont be taken a fool and the other person wont do a runner.

The only people here on public forums fall into 3 distinctive categories:

  1. The real new traders. They are still courtesy and just like a new puppy, they run around alot from thread to thread. Excited at all these avenues to make money and finally tell their boss “up yours”.

  2. The disgruntled ex-trader suffering from delusions of grandeur. They spend more time lapping up the attention from the new traders. They focus more on post count of this forum, status (super-duper contributor levels) than trading itself. Infact they hardly trade at all. These are the dangerous kind. They do not think about the risk they are putting other traders in. Some new traders lose alot of money and few lose everything to these scammers. But I guess that is all part of the wheel of fortune. Btw, they are easily noticeable as all their post is a general statement that fits into any purposes, just like saying “yes you will most likely sleep tonight”. Absolute prophets.

  3. The battle hardened tough warrior. He/she has been through everything market has to offer. Rambo did take advice from others earlier on, lost few live accounts, luckily held onto his job while getting his things straight. And one day it just clicks like that.

These battle hardened warriors do not return to forums to help others because they know they are not worth the fruit of his labor. From what he experienced, he knows he will be **** upon. Hence, they simply just disappear while the remaining people on the forum continue the ‘blind leading the blind’.

I am little different. I was fortunate enough to be introduced to this game professionally from the start. It is only recent days do I find myself adventuring around forums, partly from curiosity and amusement.

Trading is an act of solitude. Everyone is seemingly willing to help you but infact no one really can.

As for H-candles, it is usually one of the first step of indicator chosen from new traders because of the visual aesthetics of things. When reach the level of a hardened warrior, you will look back and think “I didnt even need it”. Until then you will hate me for bursting your bubble.

Here. And I know it will fall deaf ears to most.

80% of all major trends that happened in the last 10 years happened during london session.

Some professionals take note of the opening price 2 hours before london open and swear by it. They are successful because they are usually trading the open range breakout or inside bar breakout and then holding the position as a form of continuation on higher timeframe; daily, weekly or some type of long term trailing stop or even time based exits.

I (and the rest of the members of my IB group in real world) take note the price 1 hour after the london open. We watch the range form and take buy or sell when price moves 25 pips (including spread) into a direction. Hard stop loss just above or below the session high/low. However we do analysis and choose the pairs with the most potential just before the london open. As long as ‘that’ particular london session was one of the 80% days that does infact trend, your position has the greatest potential to survive.

Just about to click post reply and I feel like the class idiot and one of the most reluctant trader.

But then again all this will fall deaf ears to most. And with some cynical content I hope it does because no one deserves what I just gave out.

The smart ones will take the above into account but within the grounds of [U]‘trust but confirm’[/U] and they will be able to expand on what I have just given out. These traders are the ones that has the most potential to succeed.

Regards,

Lex

20

Wow LexKim not sure what to make of this,how do we know your not one of the people you talk of though.A lot of what you say rings true and is a bit depressing really:17: perhaps we,re all wasting out time on here expecting to pick up useful titbits of information,Im not sure now.I must say what youv writen probably wouldent have been said by a keen newbie.I like what you said about trading before and after the London open,food for thought thats for sure.;)Wnen you talk of H candles are you meaning 1hour candeles or heiken ashi candles?probably the former.

22

Thanks for your breakdowns JJ. I feel like I am getting a better understanding on how to use Gann hilo and Heiken Ashi.

Also appreciate your brutal honestly Lex. I have had some fairly good success doing some open-range breakout trading with stocks in the past, however the forex market is a completely new field for me. The problem that I have encountered with stocks is that it is difficult to find the stocks with the right setups given the number of stocks out there. Also having only 6.5 hours in the NY session means fewer opportunities for the day which is why I am interested in the forex market as it is open 24 hours.

Also I like the continuity that the forex market presents. With stocks, their trend tends to reset everyday (especially lately) and don’t seem as easily identifiable as in forex. Then again this is all speculation on my part as I do not have experience with forex.

I am going to look into what you said about the London session and really appreciate you sharing this information with us. I understand that you didn’t have to do this but your contributions with professional insight definitely helps us new traders.

I do, however, disagree with your sentiment about people on forums not there to help others out. I have founds quite a few good traders out there helping others out on forums. The tricky part is finding them as there are, like you said, a lot of phonies out there who lead newbies in the wrong direction. This is why I think it is really important to do your own research conduct your own tests to see if the given information is valid or not.

The internet is a sea of information. It is up to the you, however, to find your own path.