With Heiken-Ashi, price rarely, if ever, coincides with the candle close, as with traditional candles.
I ran a test with Heiken-Ashi, setting up a sell stop order with the entry price below the candle tip. Important observation: The candle tip pierced the entry price level, but didn’t trigger the trade. I assume it must be because the actual current price, as shown by the price line, did not touch it!
Now, every HA strategy I’ve seen says to set up a stop order a certain number of pips beyond the candle high or low; but this doesn’t seem to make sense. Why not set up the stop order a certain number of pips beyond the current price line?!
Are you referring to apparent discrepancies because of not compensating for the spread when going long or when setting a stop loss when going short? If so, I do compensate.
When you trade HA manually, do you set stop orders? If so, do you set them ahead of the candle or ahead of the price line? How has your success been?
How do the brokers you’re referring to adjust their platforms? Are they adjusting them because of the HA price line not coinciding with HA close?
I think I straightened myself out on this. The candle high or low is the farthest distance the trend has progressed, so why should one want to enter the trade at a level shy of that? I guess they’re right. Set the stop order beyond the candle high or low.
On second thought, if the stop order is set ahead of price instead of candle high or low, one may pick up many more pips.
Hi @NormanA HA candles are not “real” mate - they contain elements of “Averaging” and as such you cannot “Trade” HA candles as such.
Your pending orders, be they SL, TP or just “pending orders” will not and cannot be triggered by HA candles.
Only the real “bid” and “Ask” values can trigger any such orders, so even the “Actual price” candles are illusory being simply an average of the two, but that is something “Up with which we have to put !”
What you say is very true. That’s why I’m baffled as to why almost every strategist says to set pending orders ahead of the candle.
If I remember correctly, you use HAs. How would/do you set up your stop orders, ahead of price?
Also, if I remember correctly, you were experimenting with 2ATR stop losses. How did that go? Do you set your stops behind price?
I think it should be pretty obvious that they are not true candles, they are using the open and close price from the previous period and the open, high, low, close from the current period to create the candlestick.
It should be used to filter out noise and capture the overall trend of the market.
I wouldn’t use it for entries.
It is easier to have the HA chart and the normal candlestick charts side by side if you must. It depends on the time frame you’re trading.
I use it on the daily chart, so I only need to glance at the HA to see the current trend, then back to the normal candlesticks, on a lower time time frame to find a good entry.
Even if one begins a trade on the daily on a Monday, he’ll inevitably run into the issue of whether or not to keep trades open on weekends due to the gap issue. How do you handle that?
Do you restrict your entries to the very first candles on a new trend? How do you select your entries? What do you avoid?
Although I never keep trades open for more than 2 days max (usually) - if you are looking to ride the trend for as long as possible, you simply use a trailing stop loss and lock in profits and let the market keep going until you are stopped out for a profit.
I usually do all my technical analysis by Sunday Norm, I’ve already shortlisted all the pairs I’m looking to trade. I should mention I am a serial short seller, I rarely ever go long.
It is a good idea to find draw in your support and resistance levels for the pair you are looking at, then switch to HA to see if there is a trend going on.
Then you decide if there is enough juice left to make some money, if there is, you go down to a lower time frame to find a good entry.
Almost 1k up for the day on this pair, so is it a good idea to trail a stop loss? Possibly.
For this lets just say I trail a stop 50% behind. If I’m 36 pips up, my stop loss starts 18 pips behind, using the 1 hourly chart for reference, and it just trails lower and lower as the market moves down.
In terms of actual stop losses, to stop big losses, I’m not really a believer in hard stop losses, I use a mental stop loss and if I did set one it would be very very wide as I start with top down analysis from the monthly chart to the weekly, and trade off the weekly chart.
