Cheers
can tick that one off
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Re the HA its very similar to the daily candle whats the subtle difference.
What should i be looking for with regards its purpose.
Apologies but to move forwards need to ask now.
I know months down the line someone else will be asking if this becomes a profitable system
Cheers AGAIN
It is important to understand that HA candles are very different to normal candles and do not show the actual prices for open and close, etc. These are calculated according to a formula in order to emphasise the underlying trend.
There is much on internet that will explain more such as:
Heikin-Ashi Technique Definition and Example
The close shown on the HA candle is often very different to the actual market closing price. SO it is important to really understand what the HA charts are intended to show.
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Cheers was going to read up this weekend.
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re Stoch/rsi Len1 8 Len 2 8 Len 3 3 Count input was 950. Is the count input now 0.?
The indicator now disappeared
If the indicator disappears, try changing one of the parameters one at a time.
This happens to me too and I have no idea why. One minute the Stoch_RSI is there, then it is gone.
Problem seems to be with the *JPY pairs mostly. It might be there on the 4H but disappears on the Daily, and vice versa. Baffling.
Also, the Stoch_RSI is very heavy on CPU on some computers.
If you load the whole 12 charts with this template at once eg when booting up your MT4, you may be faced with a delay of up to a minute before the charts become active.
I am looking for an alternate indicator that is as reliable as far as indicating market turning points, and when I find it I will let everyone know.
I may be able to delete one of the other indicators, but each has a role, and I would need to be sure it is redundant before cutting one loose.
Thank you everyone for the best wishes and interest, plus salient advice.
Appreciated.
I am not unhappy about the current trades being held over weekend.
On Monday, we can expect the markets to gap - either way - before either reversing immediately, or “looping around” like they did last Monday (Australian open). So don’t be spooked - instead, watch closely on the lower TF as well as the Daily, and you will see that this is just games being played.
Have been watching these long enough to know it’s just stop-hunting, or scaring people into closing trades.
As one infamous figure would say: “Fake News.”
Quick rundown on state of play:
AUDJPY - negative 11 pips. Looks to be consolidating/ranging/whipsawing. ADX was 30 when we entered the trade, and is now down to 28.5. No reason to close out. We stay the course until we get a signal to exit.
Currently we have the price action of the Japanese Candles, and the HA candles, as well as the LWMA crosses, to tell us what is happening.
Then we have the filters - MOMENTUM as shown by MACD
ADX shows us the STRENGTH of the trend.
STOCH_RSI is a combination of an oscillator and a momentum indicator, which points to a breakout and rapid change of momentum.
Keep these things in mind - every indicator has a task even though in a flat market they all seem to be pointing to the same thing.
That’s why we don’t knee-jerk-react, and jump in/out of a trade simply because one or other of the filters is ruffled by price movement.
Some of these are based on just 2 candles of movement, and some are based on 14 or more, so that’s the beauty of correlating different time periods here.
All of that to say: Hold the course - steady as she goes. There are reasons we do it this way.
EURGBP looks to be weakening - negative 18 pips - but ADX has remained firm at 34.16.
My impression is that all we are seeing is pullback, until confirmed otherwise.
Don’t be panicked - be vigilant.
EURJPY - positive 17 pips. ADX weaker by only one point.
Nice trade - manage it.
This means getting SL to Break Even (BE) ASAP without putting the trade at risk.
EURUSD - positive 21 pips. As above.
GBPJPY - At break even - this pair finished the day about where it started.
Lacks direction and Manxx may be correct - its fate may depend on which tune the Brexiteers decide to dance to over the weekend.
GBPUSD - positive 7 pips. Even spread could eat that in a heart-beat, so the jury is out on it today.
Of the rest of the pairs I follow for this exercise, here are their stories:
AUDUSD - nice crossing of the LWMA’s. But ADX says “Ranging right now and expect a moderate reversal to an uptrend”. We will hold this attitude to the Aussie dollar until Mr ADX tells us “go get him.”
NZDUSD - same story - wait until ADX signals a buy, otherwise we are in high risk whipsaw territory.
Now if these two pairs (above) go on to make great pips without us - great!
Congratulations for not being tempted into a dangerous trade. We will be making enough pips without worrying about false entries. We will be wrong on these sometimes, and we will be wrong on the “right” trades too … sometimes.
USDCAD - in a strong downtrend - little hope of us getting a legit entry with our strategy .
However - having it on our watch list means … “WATCH it.” There is a possibility it will turn on a dime with the fortunes of the OIL INDUSTRY, and antics in the Middle Eastern oil fields. Don’t let it get under your guard.
USDCHF - We let this one go yesterday because of a weak ADX - might be 60-70 pips here … but we are not after bait-fish - we are after the White Pointers. And if we missed a trade, then we missed it - NEXT!
EURCHF - there was too much going on with our filters to allow a trade here this week. MACD was still showing downwards momentum a couple of days ago. The LWMS’s “kissed” and parted company without crossing. The Stoch_RSI was also bamboozled. No, this was too tricky to attempt to call 2 days ago, and well, it looks like one that got away. But the story could have been equally as tragic, had the pair dipped and gone south. I am thankful our filters kept us out of this pair this week.
USDJPY - Well - 'nuff said, except: “did you ever see a better example of a whipsaw?”
So this week our patient approach has paid off.
We have a couple of very good positions and a couple of shaky ones with good potential.
Managing 6 trades is enough for anyone.
So if you are following this journal - congratulate yourself.
You are showing interest in a strategy that can potentially make more pips in a week than scalping can.
I am not knocking scalping. That in itself is a wonderful skill.
But this is a strategy that allows you to make pips while away from the screen for 23 hours.
What’s not to like about that?
I am also watching this thread. I spent few hours writing down the rules. I don’t have the ADX filter coded yet. I like the EURUSD and GBPUSD trades. They should score +150 pips each and I hope the market plays nice and does not hit -1 ATR. Why would you close before weekend? This is position trading. Good luck.
Impossible to call the market at open, so will just leave it all alone as far as opening/closing/placing stops etc are concerned.
In about 5 to 6 hrs London will come alive and we can see then.
But I’d rather just leave everything alone.
When you look at any long term trend, there are up days and down days.
You have to allow trades to mature and become established.
If the trade has legs, we will soon see.
This morning’s open saw the account drop by 15 pips, but that looks to be in the process of reversing now.
Will come back in a few hours to review.
AEDST 10.30 pm Review:
There has been a lot of rise and fall in our overall positions today.
AUDJPY has moved against us by 23 pips at time of writing.
Really? 23 pips in 2 trading days? Hardly a reason to panic.
Now - please pause a moment to consider the difficulty traders are faced with in this pair if trading the lower TF - 1H and lower. The range top to bottom is 23 pips … so to us following the Daily TF, it’s something to ignore just now.
I wish I could tell the market what to do, but not going to happen, so we just trade what we see, and don’t become unsettled by what is happening in other TF.
Our “basket” of pairs has moved from +30 to minus 60 today - mostly when I was not watching.And it will continue to do that until we see our new candle in about 10 hrs time.
That;s another day and we will make decisions based on what we see at that time - not halfway through the trading day.
Turn off your computer until the new candle appears.
Additional Important information:
We are getting to the stage where some of our trades may begin to run in our favour.
And … some will continue their whipsaw activity.
That’s trading.
But we have not really discussed an exit strategy.
And we have not discussed why the Heiken Ashi candles charts form a part of the strategy.
Here’s the deal:
I do not use the HA charts to form the basis of my entries, but I do use the HA to ASSIST with EXITS.
I’ll tell you about the other exit strategies after this point with HA exits is explained.
I prefer to watch the COLOUR of the HA candles. Reason: they are GREAT for keeping us in a trend.
So what happens when the trend flattens and ends or even reverses?
We see a change of colour in the HA candles.
For that change of colour to be a legitimate EXIT signal, it has to remain that colour AFTER the close of the candle. This saves us more losses than we may have already sustained if we have been looking at other indicators .Chances are the MACD has already shown us that the momentum has slowed or flattened, and the Stochastic_RSI may have already have turned up or down to signal the end of the trend.
But unless the Stoch_RSI has already crossed the mid-point (50) we may not still have an exit signal.
That is why I use indicators that operate on different settings - we capture more information, and that can get us out of trades, or help us with trade decisions that we might be struggling with mentally.
Even the ADX indicator might be showing that trend has changed, BUT … it only takes ONE large candle to influence the ADX, and it takes between 4 and 8 candles to move some of our other ones.
Try to visually look back over charts to see where this has been true, and for you to get a feel for the signals given by the change of colour of the HA candles.
Hint: In case some may not know, you can roll your charts back a couple of months, and then advance them one candle at a time using the F12 key on your computer keyboard.
Other EXIT strategies:
- MA’s cross in the other direction and the candle closes with it in that position.
Be careful here because in a ranging /whipsaw market, you may choose to continue on with the trade, despite the loss situation. A MA cross is not always the best exit strategy, but it will do in a pinch. - Look at all indicators:
- MACD may be crossing its midline
- Stoch_RSI may also be crossing its midline
- ADX may be gaining strength in the opposite trend.
- The trade may have passed your point of tolerance for a loss.
Out of all of these, the HA candle colour change is still the earliest.
Your decision to continue or close out, may depend on how you read the other indicators, after all, they are also there to do a job.
I aim to show you what I will do when the time comes.
But like you I have my weaknesses, and will not get the mind of the market right many times at all.
So we depend on an indicator to help us out.
Sometimes that’s much easier said than done! 
but it’s critical! I think it’s key to trading the daily time frame.
Great journal @Ingot54! Tx 4 posting!
KC
Drawdown is never pleasant.
It’s hard to watch your account rotting away while a position runs against you.
But position-trading in the higher TF asks us with this strategy, to pick the turning points in trend.
We do not have to pick tops or bottoms, but use our system to get in and out of probable entry and exits based on the rules.
In the past I have tried holding on, only to see the trade erode my account, when I could have closed out and retained my account balance to re-enter at another signal.
So what I propose to do is to close positions that have hit our exit signal, and wait for another opportunity to trade them.
AUDJPY - HA candle turned green (against us) yesterday and remained green at the close this morning. The current candle has hardly moved since opening this morning.
Is it going to rally or retrace?
We do not know and cannot know.
All indicators are saying price is likely to rally, and the HA indicates we should close it.
Further, since the pair now meets the rules for a LONG trade, I intend to re-open the trade in the LONG direction.
LOSS - 51 pips. Closed/re-opened at 74.556
EURGBP - HA candle has turned red, but … price is so flat that the loss is just 18 pips.
This trade deserves the opportunity to show which way it will go.
MACD is still trending higher … slowly … and Stoch_RSI still has not hit the 50 level.
ADX is at 16 and the HA candles are barely able to sustain a red colour, based on just 18 pips on a daily chart.
HOLD. Current loss 18 pips.
EURJPY: Same as for AUDJPY.
All indicators are positive for a LONG trade, and ADX is at 48.
CLOSED short trade and reopened LONG at 120.984
Loss: 34 pips.
EURUSD - in profit +4 pips … HOLD
GBPJPY: CLOSED. HA green candle at close.
Stoch_RSI rising, though still not passing 50 level.
MACD still not confirming a rise.
ADX strongly rising at 49.
CLOSED for loss of 67 pips.
On a close watch for tomorrow for a LONG entry perhaps?
No confirmation anywhere to go long yet.
GBPUSD: Showing a loss of just 16 pips.
HA candle is green, yes, but barely, based on price movement.ADX is weak at 23.
Stoch_RSI is still well below 50 level and flat.
MACD is still showing downward momentum.
HOLD with a watch on it.
Current loss: 16 pips
Trading is not an exact science - ask those who have experimented with robotic algorithms.
So I have used a bit of “common sense” in closing or holding these pairs.
In the next post I will look at the rest of the pairs we have in the line-up.
Since many of you arte watching this, I have to say I could not have picked a worse time to trade a trending strategy. The markets have done anything but trend for us.
Given this is the case, I have bent the rules a little - not much - and give my rationale, simply because I already know how hard it is to avoid whipsaw activity. Many traders are getting minced right now because of this consolidating market.
We may miss the big breakout moves coming, because we want to follow the confirmed MA cross approach.
QUESTION: Do you think I was correct in managing these trades as I have today?
If so - why?
If not - why not?
Giving your answer here will make you think a bit.
And will help you and other readers to deal with these things in the future.
AUDUSD - Direction undefined.
Some indicators pointing down, but too early - will need to see this candle at closing time tomorrow.
EURCHF - strong uptrend continues - no signal to enter.
NZDUSD - All indicators are telling us this is a SHORT.
However the ADX is clearly not convinced, so I’m not either.
Let’s be patient, as with AUDUSD above. These two mostly move in lockstep.
USDCAD - strong downtrend continues with no opportunity to enter.
MACD looks like momentum is getting tired - watch.
USFCHF - Same story - strong uptrend with no opportunity to enter.
However, ADX is weakening, signalling the trend is slowing as price approaches most recent resistance.
Wait for rejection and retrace, which I feel is most likely here.
USDJPY - A new uptrend is underway for the second day, but despite Stoch_RSI and HA candles signalling a LONG trade, MACD and ADX are urging caution, which I will heed.
Price is also approaching recent resistance.
Again - wait for rejection and retrace.
Anything to add - feel free to comment.
A bit frustrating to see the sluggish action each day, but that’s trading.
Someone said that markets trend only 20% of the time - I’m hearing them.
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The market has been giving and taking for an hour, which is a relief after seeing the drawdown continued after this morning’s adjustments.
Thankfully we didn’t do too much wrong in those adjustments.
AUDJPY - so far the call has been working. We closed the short and went long. Still at minus 3 pips.
EURGBP - holding the fort has been ok for us, instead of selling into the whipsaw that this trade is in.
EURJPY - MACD is still losing momentum, and yet ADX and HA are still LONG fairly strongly. But Stoch_RSI which I call the “canary-in-the-coal-mine” indicator, is wobbling before it even rises to the 50 mid-line. This trade is still not out of the woods. The 4H says it is in trouble, but there will be no action until the candle closes tomorrow - them’s th’ rules!
GBPJPY - we were correct to shut this beast down this morning - it has done nothing today. Still floundering in whipsaw waters.
GBPUSD - same for Sterling, except we opted to keep it open and have been rewarded with … a recovery of the 16 pip loss and another + 18 pips in our favour … so far.
Forgot to post pip count on closed trades:
AUDJPY - Loss of 51 pips - now long
EURJPY - Loss of 34 pips - now long
GBPJPY - Loss of 67 pips.
Nett pip count since start of trading: MINUS 152 pips.
Have been looking for an alternative EXIT Indicator to remove the stress, but have still not found anything that comes near the HA colour-change thing, or the MA crosses, which is the topic we are enjoying.
Having said that, I have an out-of-print indicator called REX_Oscillator.
If you would like this, it can be downloaded here: FXCodeBase.COM: Forex Chart Indicators and Development • View topic - Rex oscillator
You will have to tweak the settings to suit your own style.
I’m not convinced it is any improvement on the HA candle colour change, but maybe you can wring some sense from it.
WARNING: It is an EXIT indicator - not meant for ENTRY.
EDIT: Added link to free Rex Oscillator download.
Anyone wanting to try some others, I found these during my search tonight too:
Schaff_Trend
Schaff_Cycle
I_XO_A_H (Amir)
Fisher_MBK
DEMA_RLH
NRTR_ATR
BuySellindicators
They can be downloaded here: Download forex indicators for free for MetaTrader 4 in MQL5 Code Base
You will need to search 57 pages of them, but all of them are in there.
It took 3 hrs to flip pages and look at examples of what each indicator can do (not all - just best candidates.)
Alternately you can message me and I will send the lot by email.
I am looking for suitable exit indicators and just checking visually I would suggest the Schaff_Cycle oscillator may be an excellent replacement for the CPU-hungry Stochastic_RSI.
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Hi Ingot54, you do have a great system here. Please forgive me for my askng a question that maybe has already been asked but i just want to find out if trades can be opened on the four hour chart ONLY when there are clear cross overs on the moving averages and not when they are coming close together. When the the moving averages are coming close together there seems to be a lot of ranges on the four hour charts. This can be bad and frustrating. But if entries are ONLY made when there is a wide distance between the two moving averages i really think it will instantly make orders go into profit and then be a lot more stress free. Thank you very much.
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Great question, Sammyru.
If you see the tight range on the Daily charts, it is guaranteed the range on the 4H charts will also be tight - more range, yes, but still almost impossible to enter and hold a profitable trade.
The SAME rules apply - wait until a candle closes with a CLEAR crossover.
Touching is not enough. We saw that in one of the charts above. The candle came close to crossing, “kissed” and then veered away.
Few people like to be disciplined - especially as we get older and independent, and believe we know enough to keep safe. But the markets go against this kind of personal security, because they are ruthless and do not owe you anything.
As much as I would like to see some nice trend begin to move price off its current flat base, it seems stuck.
For me it is very frustrating to be attempting a thread, when the market is saying: “No, I’m not going to let you show people anything.” So I just have to sit tight within the rules and take it. That, so far, just means we are going to take losses, and my job as the owner of my trading account, is to be a good manager, and keep those losses to minimal.
We HAVE to take signals if we want to be in trends when they appear. To not take those signals can mean we are left behind, with little chance of getting into a good trend when it shows up.
So just be firm with yourself and stick to the rules on the 4H.
The good news for you is that when a trend does start, you can be nearly one day ahead of the rest of us in pips, while we sit it out waiting for a confirmed entry.
The bad news is, you may also get hit with more whipsaws, as price stubbornly meanders up and down, before trending.
Just stick to the rules, and wait until the candle cross is confirmed by a 4H candle AFTER fully closing.
Frustrating right now, but safe too.
I imagine most traders - doesn’t matter which system they follow - would only be taking small scalps at the moment, and they will be keen to taste some winning trades too.
EDIT: I want to add here that the 2 and 10 Linear Weighted Moving Averages (LWMA) are far enough apart in their representations of price, that when they do cross, that cross is for a significant reason. It means the market has some degree of intention to trend. Right now there are market forces on the other side of trades, that are equally determined to stop that from developing.
Sometimes these trades are tied up with the settlement of Forex Options at EXPIRY, and if you can find out when these expire, you can also have an idea when a breakout is likely.
Hope that is useful - maybe someone reading this can enlighten us about Forex Options Expiry dates.
I found this: Hot to use the data about option expiration in Forex
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I see what you are saying, Sammyru
My immediate thoughts are that in a choppy market such as this seems to be, by the time the MA’s widen and you then take an entry, much of the move has passed and because of the narrow trading range, the trade is just as likely to run against you, as make pips stress-free.
Traders have to be both optimists and pessimists - to make profits and conserve the account.
My approach is to attempt to prove that a trend is establishing, and enter early - as soon as the MA cross is confirmed. I know we will get knocked out of many trades, but when we get into a good trend, other pairs are also likely to begin trending. That’s when we get our pips back … + some great profits.
Some of these daily trades make 160 pips - even 300 and 500+ pips.
I’m not trying to change your way of trading - I think there are some good pips to be made in your approach too. But try to confirm the trend when you do enter and you should be ok for some profits.
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Hardly worth changing the lineup at this point.
We have a 50:50 chance of making pips or losing more the way this chop is playing.
Closing trades just locks in losses, and most are not large at the moment.
If we close and get another signal to enter, that leads to the same result, so I feel it best we sit on our cards until we know it is time to fold.
If you look back at the EURJPY 4H chart, from 3rd October to 9th October, there was a frustrating period of chop there as well. Then came a breakout which - had we been around to take it - led to between 300 and 350 pips, depending on entry/exits. The breakout was on 10th October and it ran for almost 400 pips on 4H.
Entry was around 117.90 and the trade was stopped out 12 hrs into the new day at 120.96 for 306 pips as a realistic trade.
It is worth taking a look at the 4H TF when waiting for a crossover confirmation. If it seems imminent and likely, it may be worth looking for an entry there. Personally I like both TF - that’s why I included the 4H in the heading of the journal.
Right now I’d like to see the Daily strategy working for us first, before turning to the 4h - it will come.
Meanwhile, I know many of you are quite experienced - so don’t discard the 4H - it’s a lot more fun if you enjoy the thrill of the trade.
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Taking some notes to add to my book of wisdom. Thanks!
On futures, @bobmaininc mentioned the COT report that could provide some info on where weekly sentimen is likely to be.
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Thank you very much Ingot54, you see the agressive approach you are sharing when you imply we enter even when the crossover has not widened is good in the sense that one can catch a trend early. But of what benefit is it to trade with stress? To trade with some kind of tension? We are looking for high probability trades. It does not pay to keep on making profits on smaller timeframes and then to lose them all together when a major move from the daily is triggered when Central banks make dovish or hawkish statements or release their forward guidance. It has happened severally and it will reoccur. One might be making profits but when the daily chart in consonance with the four hour charts start roaring, the smaller timeframe traders get hurt. I use to be hurt like that until i transitioned and thank God for that. So for me when the MAs are close to each other they imply that there is some level of uncertainty and we can just relax and wait for the higher probability setups when they widen apart by drilling down to four hour chart or even one hour ( i don’t fully rely on one hour except certain times) then entry can be made with ease and great results. Please exits too will depend on the Daily please when the faster MA begins to flatten.
Thank you very much Ingot54 …
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Well said and well laid out Ingot54. However as you have said it is very necessary to combine the four hour chart for finding suitable entry and exit spots. I personally use the two daily and four hour timeframes in my strategy. it is a gold mine. Citing the same instance you gave us of 3rd to 8th of October this month for EURJPY, is worth commenting.
This is why i said aggressively relying on the crossover on the daily without them widening will lead to choppiness on the charts, four hour chart inclusive with its attendant psychological trauma especially when the trader in question does not know or apply the utility of Money Management by opening small volumes to protect their accounts.
Indeed and true to your proposition in this system the EURJPY rallied from after the 9th of October up to the 21st from where it has been ranging up till now waiting for the fundamentals to further confirm and give it impetus. The markets are in risk on mode as positive news has been coming from US and China trade talks on agreements almost reached for the first phase.
This is a great system that should be given consideration by traders but then this is my opinion. I would also like to add that if traders intend to scalp or day trade they should also be aware of these two timeframes, Daily and Four hour charts and keep abreast of Sentiment events. But for me i stick to the two and it has been working well for me.
Thank you.
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