I want to first state that this is not my system. I actually found it on YouTube as any one of you can. The fellow that makes the videos has done several videos and I have been slowly learning. I was drawn to the videos because of Heikin-Ashi candles to which I have become very interested.
Anyways here are the rules:
Timeframe: He says that it doesn’t matter, although almost all of the example videos use Daily. He did recently make a video on the 5 minute chart.
Pairs: Any
Chart: Heikin-Ashi
Indicators: 50 Simple Moving Average
Trade ONLY Long above 50SMA and ONLY Short Below 50SMA
Entry in Long trade is the candle opening after any red(bear) candle.
Entry on Short trade is the opening after any green(bull) candle.
Stops are below or above the previous swing low or high.
Take Profit is the next Swing High Resistance or Swing Low Support.
I have been actually trading this with real money for a couple weeks now and would be interested to know if others are trading this method. I would love to be able to discuss ideas with others.
I think I’ve perhaps seen some of the same videos as you, and I wish you good luck with it.
Please excuse me if my post sounds discouraging, Sean, but I backtested it (only on GBP/USD and USD/CHF) a couple of years ago, on one-hour, three-hour and eight-hour candles - the one-hour candles only during the most active session of each day - and I found that all three [U]lost[/U] money over the long-term. I was using a 60-EMA where you’re using a 50-SMA, but the idea’s the same.
The principle sounds valid, of course (because you’re effectively entering [I]with[/I] the main trend after something that was hopefully just a retracement, in so far as an individual HA candle can represent that?), but my results all showed that the win-rate wasn’t high enough, overall, for the wins to cover the cost of the losses, although of course, like any trend-following method, it can certainly have good some days/weeks/months. A year’s results put me off it, though, and fairly firmly.
(My own perspective is that if HA candles have a valid use, in this context, it’s more to do with [I]closing[/I] positions than entering them.)
I appreciate your comments. I am really interested in listening to comments from people that have some experience with HA candles.
I am having some moderate success in the very short time I have been at it with this. I will keep updating my experience and would input from others that have experience with HA both good and bad.
Thank you kate25. My research has found that there is something to this Heikin Ashi. I have been trading small 5/15 Min time frames using just 50 SMA for direction. I have been also using Weekly, Daily, 4H, 00 Levels and 50 Levels as S/R.
I am still very interested in hearing and seeing the experiences others are having or have had in all time frames.
One thing I keep finding is how people either really like HA or seriously dislike them. Interesting.
Yes, interesting … I suspect there’s some instinctive antipathy to HA candles for two primary reasons …
Whereas both conventional bars and conventional candles clearly display the [U][I]open[/I][/U], high, low and close of each selected period, this observation clearly isn’t true of HA candles;
HA candles are a cross between a “charting method” and an “indicator”, and some people who don’t trust or like indicators are perhaps likely to look askance at them simply for that reason?