Spotting entry and exit points with heikin_ashi

Took my first trade with this method this morning.

It has been a long, long time since I last traded USDJPY but I liked the look of the setup.
I am also looking into watching the same signals on a 3H chart to see how it performs in setting up entries/re-entries and exits alongside the daily chart trend…

I have also added a 12-period RSI based on the HA closes with only a 50/50 line drawn. I am hoping this will help give additional confirmation of an entry and, even better, help to avoid fakes.

The Daily JPYUSD finished last week still in a negative mode. But the 3H had reversed on Friday, suggesting that it could be prudent to close out for the weekend and look for a return to the trend today.

We got a reversal on the 3H back in line with the daily trend early in the morning so I sold it there. It is still a sell but I closed it at the pyscho resistance 110.00 as this is a first trade with HAs and with a pair that I am not familiar with and because the main trend already started some weeks back around 114. So, as always, I like to “earn while you learn” rather than “burn while you learn”

Interestingly, the 3H also gave a reversal in USOIL against the still bullish daily and did indicate correctly that today would see oil prices down (but this was a exit signal and not an entry signal since it is 3H against Daily and the trade should be 3H back into the daily direction as with the JPY)

Daily chart:

3H chart:

I’ve decided to experiment with this swing-trading strategy using an Oanda demo account, in order to get a feel for both the strategy, and the Oanda platform. Captgrumpy, the OP, specified Oanda as part of the set-up for this strategy – and, although I believe that any charting package which includes Heikin Ashi candles would work just as well as Oanda, I’m trying not to make too many changes to grumpy’s methodology right out of the gate.

That being said, I’m going to watch a much larger menu of currency pairs, than captgrumpy specified. I’m going to watch all 7 of the USD major pairs, plus 21 major crosses, plus 2 USD minor pairs – for a total menu of 30 currency pairs. My watch-list is shown below.

Grumpy suggests that this strategy is applicable to time-frames from 6-hours to 1-week. I will use only daily charts for this experiment.

And grumpy further suggests that early entries can be made when the WMA-5 changes direction, but before the H/A candles change color. I will use the less aggressive approach of requiring both signals – the WMA-5 change of direction, and the H/A candle color change – before entering (or reversing) a position.

Lastly, grumpy uses the term TP, meaning trade point, to designate the signal to enter or reverse a position. I think that terminology is confusing, because most traders read TP and think take profit. So, I will refer to signal candles as entry candles or SAR (stop-and-reverse) candles, to avoid that confusion.

My Oanda demo platform closes each daily candle, and opens a new daily candle, at 17:00
(5 pm) New York time each day. The first daily candle each week opens at 5 pm on Sunday. The last daily candle each week opens at 5 pm on Thursday.


Following the opening of the Monday November 27 candle (at 5 pm NY time today), the 30 pairs on my watch-list indicated the following:

PairMost recent signal

  • EUR/USD — November 21 - up
  • USD/JPY ---- November 7 - down
  • GBP/USD — November 14 - up
  • AUD/USD — November 27 (today) - down
  • USD/CAD — November 26 - up
  • USD/CHF — November 21 - down
  • NZD/USD — November 21 - up
  • AUD/CAD — November 22 - up
  • AUD/CHF — November 2 - down
  • AUD/JPY ---- November 6 - down
  • AUD/NZD — November 21 - down
  • CAD/CHF — November 12 - down
  • CAD/JPY ---- November 12 - down
  • CHF/JPY ---- November 27 (today) - down
  • EUR/AUD — November 22 - up
  • EUR/CAD — November 22 - up
  • EUR/CHF — November 23 - up
  • EUR/GBP — November 22 - up
  • EUR/JPY ---- November 23 - (?) (this is the messiest chart on my watch-list – ughh!)
  • EUR/NZD — November 27 (today) - down
  • GBP/AUD — November 23 - up
  • GBP/CAD — November 13 - up
  • GBP/CHF — November 21 - down (almost as messy as the EUR/JPY chart, above)
  • GBP/JPY ---- November 26 - down (4 fake-outs since November 1)
  • GBP/NZD — November 22 - down
  • NZD/CAD — November 21 - up
  • NZD/CHF — November 26 - up
  • NZD/JPY ---- November 23 - up
  • USD/MXN — November 15 - down
  • USD/CNH — November 27 (today) - up

Based on those indications, I have entered:

  • AUD/USD (short)
  • USD/CAD (long – one day late)
  • CHF/JPY (short – ugly chart, but I held my nose and entered anyway)
  • EUR/NZD (short)
  • NZD/CHF (long – one day late)
  • USD/CNH (long)

I placed a 100-pip trailing stop on each trade (except the dollar/yuan which has a 300-pip trailing stop).


Each of these trades will be monitored intraday to ensure that the required WMA-crossover occurs, confirming the trade. Thereafter, those trades which are confirmed by the crossover will be evaluated once per day (after the 5 pm daily close) to determine whether they should be held open, or closed on a stop-and-reverse (SAR) basis.

For the next few days, I will report the results of these trades.

Open trades from yesterday (total P/L = 11.6 pips)

AUD/USD (short) -
USD/CAD (long) - crossed
CHF/JPY (short) - crossed
EUR/NZD (short) - accidentally closed
NZD/CHF (long) - crossed
USD/CNH (long) -


New trades signaled today (trades placed at 5:45 pm NY time)

USD/JPY (long)
USD/CHF (long)
AUD/CHF (long)
EUR/AUD (short)
EUR/GBP (short)
GBP/CHF (long)
GBP/JPY (long)
GBP/NZD (long)

1 Like

Open trades from yesterday (Tuesday November 28) - 12 trades

USD/JPY (long) -
AUD/USD (short) - crossed
USD/CAD (long) - crossed
USD/CHF (long) -

AUD/CHF (long) -
CHF/JPY (short) - crossed
EUR/GBP (short) - crossed
GBP/CHF (long) - crossed
GBP/JPY (long) - crossed
GBP/NZD (long) - crossed
NZD/CHF (long) - crossed

USD/CNH (long) - crossed (barely)

Unrealized P/L = 378 pips

Closed trades - 2 trades

EUR/NZD (short) - closed accidently (-2.6 pips loss
EUR/AUD (short) - stopped out (-68.1 pips loss)

Realized P/L = -70.7 pips loss


New trades signaled today (trades placed at 5:20 pm NY time) - 4 trades

NZD/USD (short)
AUD/CHF (short) - stop-and-reverse, closing previous long
CHF/JPY (long) - stop-and-reverse, closing previous short
EUR/JPY (long) - crossed

1 Like

Thanks for doing this @Clint

  • Just to clarify - when your signal occurs (End of day your time ?) - You’re just doiing an “Entry at market” and the reverse when the trade finishes ?

captgrumpy
Hello Clint–First off I want to thank you and simple siman for your interest in my proposed plan and all the work you have put into it.As noted,I too wondered why so few traders responded-- I
suspect a couple of things–it’s for SWING trading–it uses Heikin-Ashi candles --I am pretty sure there are hundreds of new and struggling traders who might benefit by at least having a look --Oh well --like is said ‘you can lead a horse to water,but you can’t make him drink’! You two have gone over the plan’ with a fine toothed comb’ and you have come up with a lot of things I
didn’t know about and it is probably better I don’t because then
I wouldn’t feel comfortable with the mild aggressive aspect of
my plan Let me digress a bit to give you some background as to how I came up with such a 'wild’plan I am 89 years of age,got ,\my first com[uter ar 80, got into Rx trading in 2011-signed up with oanda for a practice account–soon after got an active account–($5000) before long lost most of the funds in both accounts (does that sound rather familiar?) I decided that if I
stayed with Fx trading I had better learn a lot mote about this business.So I did a lot of reading and studying trying to find a good trading strategy I could use–since I was unable to do this I decided to try to find a plan of my own–This plan had to be simple,easy to use and profitable–Having spent at least 2 years
trying to PREDICT when a particular currency pair MIGHT reverse
direction (as I suspect most traders have,and still do) I finally decided that doing the same thing over and over expecting different results was not working,I decided to try to see if I could
learn exactly when a pair ACTUALLY reversed–not when it MIGHT.So after another 2 years or so I finally did come up with a
pretty good plan but it took another couple of months before I discovered the WMA5 seemed to be pointing out potential trade points when the Heikin-Ashi ended or began a run–then when I
took the chart to maximum resolution ,when the candles now became solid blocks,all the details became much clearer I didn’t
believe such a simple thing like a WMA5 could help spot
entry and exit poins—so after doing some back testing I was
pleased with the results so decided to post it on babypics hoping
it might help other traders–so that is how all this came about.

Now to get back to your last post about really give the plan a good test–a few comments–I was surprised that your oanda
charts closed at 1700 hours–my chart (1 day ) close at 0000 hours12 hr charts at 1200 and 0000hrs.–8 hr charts at 0800–i600–0000 hrs and so on .With your charts closing at a different time I don’t expect your results to be like they would be with my
chart.–also if you are not going to trust the WMA5 signal that too will affect the outcome–If you do not have your chart at maximum resolution you may not clearly see when the WMA5
makes the change–here it shows the block hit with lots of time to make the trades at the close of that block (trade between 2345 to-0000 hrs on my chart–gets close to actual closing time)

Since posting this plan I have changed the WMA5 setting to WMA 2–it shows the small peak clearer and spots the PTP
up to 2 days earlier than the WMA5 I know you find this hard to
accept because it goes against the normal–I mentioned at the beginning you would have to be prepared to do something
different–well this is something different!!!
Another thing I found --the WMA 2 (in place of WMA5)_Works
equally well with the candlestick candles–I checked the EUR-USD charts back about 2 months and the results were identical–same price-- -same day. The 2 charts look different,but in the end the-- same results.
A statement""" Every time the WMA2 makes that small peak when it changes direction,it indicates a POTENTIAL trade point (PTP) (this instead of the confusing TP)–however–every indicated PTP does not qualify for a trade–!!There are certain checks that have to be done when a PTP is indicated–such as the chart trend—whether the WMA12 is away from the main chart (if quite far away chart is in a positive run and will remain on the run until trade is closed by a qualified PTP–Also,where on the chart the PTP occurs–if it occurs in the top or bottom 25% of the chart the trades are made without further checking.
When a trade is closed --if the signals were strong enough to close the trade they are equally strong for opening a new trade.One just has to have faith–it takes considerable practice to
have confidence this is OK–If a trade is made and the WMA2 does not cross the WMA12 the trade is closed,usually with a bit of profit,so there isn’t a big risk if a mistake is made
There care two other items I 'd like to mention—One is about stop loss setting 9that I wasn’t tvery clear on–as you know this a matter each trader has to deal with and come up with a good SL
plan that suits their style and gives he necessary protection.This is how I use the stop loss factor–When a trade is opened I enter details on a daily work sheet–I write down the maximum number of pips I am willing to lose if the chart goes the wrong way–if that number is reached the open trade is closed–take the loss and wait for the next PTP to open a new trade–this seldom happens
because if the WMA2 does not cross the WMA12 the trade is closed–however there are rare times when the chart may go up a bit before starting down as it was supposed to -with the closing plan in place there is no panic if this takes place–I do set s stop loss well out just in case the chart takes an unexpected move against me .For the 1 day chart this SL is set at 400==seems high but I would rather lose that much than be wiped out.I have a policy to never hold a losing trade in the hopes it may bounce back-I just close the danged thing–take my loss while it is still small and move on to a new trade.The second point eludes me at this moment.I hsve rambled on far too long ,but there a few oo[points I wanted to clear up—Looking forward to the results of yout testing.I hope simple siman sees this episode too–maybe he’ll have comments !! In he mean time–good trading
captgrumpy…PS–spelling may be a lillte strange at times!

I
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tr

.

1 Like

[quote=“captgrumpy, post:20, topic:122057”]
Hello Clint–First off I want to thank you and simple siman for your interest in my proposed plan and all the work you have put into it. [/quote]
Thank you, but I actually deleted all my previous posts once I noticed that Clint was starting to do a major test on this and I didn’t want to dilute his work here. My own interest here arises because it is very similar in principle to what I have already been doing live for many years but on short term charts (mainly capital building, not income earning). But now my interest is migrating to daily or longer term on a more investment type basis and I recognised that this approach you have been developing does have potential. But since I would only be adding it to my own method, it would only be a hybrid version of yours and hence my decision to stay out and not pollute Clint’s work with the pure “real thing”.

It is actually quite interesting (for me) to follow this. Clint has a realised loss of -70.7 pips but a nice unrealised profit currently of +378 pips. I have taken 3 trades and have a realised profit (live) of +114 pips but no positions open! My own approach here is to wait until there is some “symbiosis” between the Daily and the 3 hour charts and then trade whilst the 3 hour is still in synch with the daily. The profit should/would have been more because the JPY move was already some days old before I started looking at this and I only caught the tail end of it. The CAD worked well and should still be open but I closed it because it is an oil-based currency and today is a big OPEC meeting day and this was actually my first trade ever with CAD and it is a new methodogy! I am, by nature, a very cautious and patient trader!!! (the third trade was a targetted short on EURGBP).

The interesting background here is how much relevance is there concerning the time of year. This method is designed to get the most juice out of extended moves, but does also provide opportunities to grab more modest gains after each signal. So I am interested here to see how well this performs across Clint’s range of pairs during December. (the summer months would be the other seasonal period of quiet and/or erratic movements)

May I be the first to sincerely congratulate you on entering such a venture at such an honourable stage in your life! And for having absorbed, and so intelligently processed, so much experience and theory. You set a fine example to others here! Your conclusion here has been repeated many times on BP that ultimately it is best to develop one’s own tailor-made trading plan.

Once again, IMHO, you have arrived at precisely the right answer here. Whilst Fundamental Analysis is concerned with using current data to predict future direction, Technical Analysis is only concerned with identifying what the majority of all active participants are actually doing right now and jumping on the same train to see how far it might go.

This is a really radical deviation from the original plan and I must confess I am not very optimistic about using a 2-period MA of any kind (I won’t be changing my approach to test this). I hope very much that Clint will continue on the original plan with the 5-LWMA otherwise the work done so far is meaningless. But I keep an open mind and am always happy to be proved wrong. :smile:

This is also, IMHO, a very important point. As I have said previously, I don’t, in principle, like the idea of automatic Stop-And-Reverse (SAR). If one takes a lot of time looking for valid original entries which fulfill defined criteria, why would one then take a reverse entry without the same degree of consideration? I also prefer the approach to “Stop”, then evaluate, then “Start”. One important and major consideration here is the underlying strength of the prevailing trend. A signal can often occur in the opposite direction whenever there is a correction rather than just a “dip” and then it is best either to wait for a re-entry signal or set a close target point of say 30-50 pips or to a S/R level etc rather than just waiting for a reversal signal. The reason being that when a strong trend does continue it is often with a very strong move on the day which would wipe out profits before the end-day signal can be given.

I think this is also a very revelant and sensible point. I have also recognised that a “normal” type stop is not much use when trading daily charts as “normally” the market reversals close the position before the stop would get hit. But in FX there is always sense in setting a “disaster” or “air bag” stop that limits the damage in the event of a seriously big and sudden move occuring - as they sometimes do.

Sorry for writing so much, but I wanted to answer your points. I will delete this post as well in a few days, after I have assumed that you have read it, so that Clint’s continuity does not get overly distracted.

S_S

Correct.

If a get a signal for XXX/YYY, and I currently have no position in that pair, then I will enter a market order (to buy or sell, as the case may be), with a predetermined position size, and a predetermined stop-loss.

If I am in a trade, and the WMA’s fail to cross as expected, I will simply exit that trade on a market order (without reversing it).

If I am in a trade, and I get a signal to reverse, I will exit the existing trade and enter a new trade in the opposite direction, again using a market order. Being in the US, where hedging is prohibited, I can do this in one step by simply entering a market order in the opposite direction for twice my normal position size. This cancels my existing position, and leaves me with a net position of one normal position size in the reverse direction.

All these actions are taken shortly after the close of the daily candle – that is, shortly after the opening of a new daily candle.

Regarding “end of day your time”, see my reply to captgrumpy, below.

[quote=“captgrumpy, post:20, topic:122057, full:true”]

Now to get back to your last post about really give the plan a good test–a few comments–I was surprised that your oanda charts closed at 1700 hours–my chart (1 day ) close at 0000 hours 12 hr charts at 1200 and 0000 hrs.–8 hr charts at 0800–1600–0000 hrs and so on .With your charts closing at a different time I don’t expect your results to be like they would be with my chart.[/quote]

Hello, capt

I assume that you are using the Oanda fxTrade platform, not the Oanda MT4.

In the fxTrade platform, daily candles open and close at 1700 (5 pm) New York time for every user, regardless of location.

Click Tools (on the top tool bar), click User Preferences, then click Local, and check the time-zone shown there. I suspect that it will show GMT+2 (that’s currently eastern Europe). Change it to GMT-5, which corresponds to New York time.

Now scroll your cursor from one daily candle to the next, and notice that the time-stamp for each candle shows the date and the 1700 time.

Finally, to prove to yourself that we are all seeing the same charts, go back to Tools/Preferences/Local, and enter a different time-zone. As you click on Apply and Save, notice that the candles do not change at all.

Regardless of the time-zone entered (on the Local tab), the candles always remain the same. Only the time-stamped date/time changes.



Later I will reply with additional comments on your lengthy post (above).

[quote=“Simple_Simon, post:21, topic:122057, full:true”]

[quote=“captgrumpy, post:20, topic:122057”]
Hello Clint–First off I want to thank you and simple siman for your interest in my proposed plan and all the work you have put into it. [/quote]
Thank you, but I actually deleted all my previous posts once I noticed that Clint was starting to do a major test on this and I didn’t want to dilute his work here.

I will delete this post as well in a few days, after I have assumed that you have read it, so that Clint’s continuity does not get overly distracted.[/quote]

Hello, Simon,

I was sorry to see that you deleted your posts. Your contributions to this thread were, and are, valuable.

I was especially sorry to read that you deleted them on my account. Your posts do not distract, in any way, from mine.

I think this thread will benefit from more participation, not less.

Please reconsider the decision to delete your latest post.

And, if possible, please consider restoring the three posts you have already deleted.

3 Likes

Yes, Simon your posts are very salient…please restore…

I made +64 pips yesterday on 3 GBPAUD trades using the 5/12 WMA setup. I am now in a quandary regarding both using regular Japanese candlesticks vs Heikin-Ashi, and WMA 5 vs WMA 2.

This is a very good start to this thread, and I hope to be able to contribute to its success.

Green pips for all!

Okay, grumpy, now you’re really confusing me.

Back in post #4 in this thread, you said:

[quote=“captgrumpy, post:4, topic:122057, full:true”]

At, or close to, the end of a run the WMA5 makes a direction change which I called a small spike–it is really just a small peak indicating the chart has (or just about to) reversed direction. This is what I call a trade point (TP) with trades actually made at the opening of the first block (candle) after the TP. On the trades on your chart you show the trades at the closing of the block.[/quote]

So, you were clearly saying that trades are made after the close of the daily candle on which the signal occurs.

In your latest post, you say:

[quote=“captgrumpy, post:20, topic:122057, full:true”]

If you do not have your chart at maximum resolution you may not clearly see when the WMA5 makes the change–here it shows the block hit with lots of time to make the trades at the close of that block (trade between 2345 to 0000 hrs on my chart–gets close to actual closing time).[/quote]

Now you are saying that trades can be made in the last 15 minutes before the close of the signal candle.

So, which is it?


[quote=“captgrumpy, post:20, topic:122057, full:true”]

Since posting this plan I have changed the WMA5 setting to WMA 2–it shows the small peak clearer and spots the PTP up to 2 days earlier than the WMA5 I know you find this hard to accept because it goes against the normal–I mentioned at the beginning you would have to be prepared to do something different–well this is something different!!![/quote]

This may, or may not, be a significant improvement in the strategy.

However, with the exception of the watch-list used, I have attempted to set up a test of the strategy as you first proposed it. Making changes to the strategy while the test is still going on would totally confuse the results. So, I will ignore any and all tweeks to the strategy, while I am running this test.

I haven’t decided how long to run the test, but one of my objectives is to see all of the various things that can happen using this strategy – successful trades, failed trades, stop-outs, reversals, whip-saws, etc. – and get a feel for how often those things happen. So, this test will run for many days, at a minimum.


Let me digress for a moment, and deliver a mini sermon:

For anyone just joining this conversation, I’d like to point out that even a heavy-duty watch-list (30 pairs in the case of this test) can be handled with very little time spent each day. It’s entirely possible to ignore the platform, while it runs 24/7, and simply open it up for analysis and update once a day, for 30 minutes or less.

This test is currently running 13 positions (one position got stopped out since I last reported my metrics), and it’s currently showing 1,350 pips in unrealized profit.

In about 2½ hours, after today’s candle closes, I will spend half an hour, or so, reviewing my entire watch-list (which includes 13 pairs currently being traded, and 17 pairs not currently traded) to (1) look for new signals, failed crosses, stop-outs, etc., and (2) exit existing trades, and/or enter new trades, as those signals dictate.

Thirty minutes a day to make more profit than most intraday traders can make sitting in front of their screens all day long.

End of sermon.


[quote=“captgrumpy, post:20, topic:122057, full:true”]

There are two other items I’d like to mention—One is about stop loss setting that I wasn’t very clear on–as you know this a matter each trader has to deal with and come up with a good SL
plan that suits their style and gives the necessary protection. This is how I use the stop loss factor–When a trade is opened I enter details on a daily work sheet–I write down the maximum number of pips I am willing to lose if the chart goes the wrong way–if that number is reached the open trade is closed–take the loss and wait for the next PTP to open a new trade–this seldom happens because if the WMA2 does not cross the WMA12 the trade is closed–however there are rare times when the chart may go up a bit before starting down as it was supposed to -with the closing plan in place there is no panic if this takes place–I do set a stop loss well out just in case the chart takes an unexpected move against me. For the 1 day chart this SL is set at 400==seems high but I would rather lose that much than be wiped out.[/quote]

If I understand your stop-loss rules, you employ both a mental stop-loss (not entered into the platform) and a 400-pip catastrophic stop-loss (which is entered into the platform).

Do I have that right?

Welcome @Bobkat!

Well done with those trades! Today was EURUSD’s turn for me, a nice rally and another nice plus day! :slight_smile:

Personally, I am continuing with the 5 LWMA and not the 2 LWMA for now. I suspect that an MA with only 2 periods may provide too many fakes and also maybe destroy the purpose of gaining the most out of the longer trends? I like what I have seen so far with the 5 MA and will give this a thorough go first. But this is all new stuff for all of us, I think? What are you, @Clint, planning to do about the shorter MA? Edit: I just read your above post and I am glad you are also continuing with the 5 LWMA :slight_smile:

I also am finding it uncomfortable to change from watching normal candles to looking at HA! :slight_smile: and I have therefore reset my charts to show both (see below)!

I don’t know if this is possible with MT4 but on my platform I have set the HA as an indicator in a separate window beneath the normal candles and set the 5/12 LWMA band on both. This way it is easy to follow both the candle types simultaneously. I guess this needs a larger screen than a normal laptop. I have a 21" screen and it is fine on that, anyway.

This also seems to provide one other unexpected benefit: Whenever a daily HA candle and the 5/12 are still in line with the prevailing trend but the actual normal daily candle closes in the opposite direction, then this potentially offers a strong rebound in the next day or two. It is a kind of divergence…

You can see this in the following chart.

I have also added another technique that I employ quite a lot in longer TFs and that is a “Shifted” 12 LWMA shown in black on the chart. It converts the 12 LWMA into a ribbon and whenever that ribbon crosses it “confirms” the reversal given by the 5/12 and also supports the continuation of the trend until the next crossovers.

This ribbon also helps avoid some fake moves given by the 5/12 that do not cause the ribbon to cross. I have ringed some examples in the USDCAD daily chart below.

That is a truly amazing result! :smiley:

2 Likes

Open trades from yesterday (Wednesday November 29) - 13 trades

USD/JPY (long) - crossed
AUD/USD (short) - crossed
USD/CAD (long) - crossed
USD/CHF (long) - has not crossed - will wait 1 day before exiting
NZD/USD (short) - crossed

AUD/CHF (short) - previous cross
CHF/JPY (long) - crossed
EUR/GBP (short) - crossed
EUR/JPY (long) - crossed
GBP/CHF (long) - crossed
GBP/JPY (long) - crossed
GBP/NZD (long) - crossed

USD/CNH (long) - crossed

Unrealized P/L = 1,372 pips profit (prior to adding new trades signaled today)

Closed trades (since yesterday) - 3 trades

AUD/CHF (long) - reversed
CHF/JPY (short) - reversed
NZD/CHF (long) - stopped out

Realized P/L = -213.9 pips loss (since the start of this test)


New trades signaled today (Thursday November 30) - 7 trades
(trades placed at 5:20 pm NY time)

EUR/USD (long) - previous cross
AUD/JPY (long) - crossed
AUD/NZD (long) -
CAD/JPY (long) -
EUR/NZD (long) - crossed
NZD/CHF (short) - crossed
USD/MXN (long) -


Current position of this test: 20 open positions

2 Likes

To all - I’m just wondering whether there is something fundamental happening in the forex markets at the moment which is rendering this strategy abnormally positive ?

I’ve spent much of this evening popping the parameters onto various charts and they all show some decent profit opportunities - with or without the Haikin Ashi !

The 5-12 WmA is throwing up great gains in the recent past, whereas I’m sure when we first started - most of us tried “moving average crossovers” and moved on because they didn’t work.

With the extended policy of "strong dolla"r from the fed and the German policy of “weak euro” - both of which seem to be unwinding a little - ?

There seems to be no doubt that the 5-12 WMA crossover is working very well atm - I’m just not sure it will turn out to be “A Man for all seasons” However I remain very interested in this thread and the 1300 pips ! and that over only a few days :sunglasses:

Thanks agin for your industry @Clint

1 Like

captgrumpy—Hello again Clint ,and simple siman,for raking on this testing project–I think we’ve got the right man for the job.You mentioned that it only took you about 30 minutes to check all the charts and that the charts only have to be checked once a day,and still show a good profit with none of the hassle with day trading----It suits my style …

To respond to your questions–RE the change from WMA5 to WMA2 --I think this is an improvement as it is easier to see and it is much closer to the actual HA block color change----I agree that for the test it would be best to stay with the original WMA5…Perhaps at a later time you could see if the WMA2 produces better results–I think you’ll see a sizable difference!

On the matter of chart change time all my charts from 10 min.4,8 Hr…1 day and weekly all change at 00.00 New York time
(EST)on the oanda Rx trade program.

Sorry about the confusion about when trades are made–the
proper time is just BEFORE closing time (for me that is between
2345 to 0000 hours)This gives time for the WMA change to show and still be able to trade at the end of the indicated block.
I find this much clearer with the WMA2 !

I think these are the main points that needed clarification.I’ll be
watching with much interest as you continue testing.I am glad to see the plan seems to have some promise–and that so far a few
pips gain in a short time.I think the hardest thing is going to be
deciding when not to trade the PTP as indicated.

Any way I’ll try not to do any more posts and let you get on with you self imposed task–If there is anything I can do to help let me
know—And thanks again for everything

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Hi captgrumpy,

What transpired with your previous thread where you were using 12 hour charts and HA candles?

I chose just 2 currency pairs to trade this evening: EA and EU. Currently positive +34 pips. I am trading this strategy slightly differently. I will share my method if it is a profitable endeavor.

Green pips for all!

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[quote=“Falstaff, post:30, topic:122057”]
To all - I’m just wondering whether there is something fundamental happening in the forex markets at the moment which is rendering this strategy abnormally positive ? I’ve spent much of this evening popping the parameters onto various charts and they all show some decent profit opportunities - with or without the Haikin Ashi ! The 5-12 WmA is throwing up great gains in the recent past, whereas I’m sure when we first started - most of us tried “moving average crossovers” and moved on because they didn’t work. [/quote]
Hi @Falstaff!

You are certainly correct that a good plot does not make a best-selling novel and a couple of days with this approach does not prove anything - yet!

But no one is making any conclusions or claims here yet, either - just reporting on the test results as we go. We are all just “looking into the matter”. A couple of points:

  • You are certainly right that there may be certain influences in the FX market that might be creating good moves right now and that was one reason why I mentioned earlier that I am interested to see how this works out during December. But, for example, I don’t see anything currently exceptional in the chart below in which I have squeezed 2 yrs of daily moves of the USDOLLAR index:

  • Of course, you are also right about “MA Crossover methods” not working. I am sure computer systems have tried out every single possible combination of MA types and every possible combination of periods that could ever be invented and with no positive result over a prolonged period…but this is not a crossover method". It does not enter or exit on a crossover, it does both these prior to a crossover which , when and if it subsequently occurs, just keeps an open trade open until the next TP is observed.

  • It is true that this method requires extended, continuous trends to bring in the real pips and to cover the smaller losses arising from false starts and fakeys. This is (for me) very interesting since it is the identical approach that was the basis of the “High 5” method that was presented on another thread. That method required identifying good trends and creating a basket of “securities” and was constantly in the market on a SAR basis. That has made good profit all year in crude oil but other testers failed to make profits in currencies. It was based on breakouts through the daily low/high from the previous 5 days, and this was its weakness. It was always late into a move and late out and therfore gave back a lot of its potential profits…but this method, in theory, does the opposite and gets you into and out of a position very much earlier - hence my interest here! :slight_smile:

  • I admit that I have not traded this so far strictly within the rules because I am trading it live and I was not going to risk my end-month results on the basis of a trial in the last 2 days of the month! :slight_smile: So although my entries were method-based, my exits were pip-grabbing only - but it gave me 3 good trades with no losses.

  • I would also add that I have a strong interest in studying this (maybe more as a discretionary method than an automated system) because MA based methods have been my core trading method for some 20 years, which includes my institutional trader days, and I have always found it to be a reliable basis for discretionary trading when combined with a logical personal assessment and a sound risk/money management policy. I have never posted my trades regularly here on BP except sometimes to illustrate a point or as a joke! :slight_smile: but I will start to do that here as from January if, by then, we are seeing some consistent results and established some embellishments to control fakeys and excessive stoplosses.

But I think it is good, if not really important, that we all look at this from our own perspectives and trader profiles and get a more comprehensive analysis of its versatility and strengths/weaknesses - there is little point in us all doing the same tests.

It is really encouraging to see you are interested in this approach and please do keep up the thoughts and opinions :slight_smile:

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[quote=“captgrumpy, post:31, topic:122057”]
Any way I’ll try not to do any more posts and let you get on with you self imposed task–If there is anything I can do to help let me know [/quote]
Well, @captgrumpy, there is something you can do to help.

This is your creation and I would therefore assume and expect that you are also actively trading this either on demo or live - and as thread/method owner, I would like to see your results, good and bad, also appearing here, preferably with charts, and comments on specific trades? Is that not possible?