Spotting entry and exit points with heikin_ashi

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41

Interesting! and a good testing day for this method!

I was wondering, is this swinging from big to small profits due to the method itself or because of possible excessive correlation or imbalance in exposure in some of the pairs we are looking at here?

I have also have a rock and roll day. I am only looking at 5 pairs and could find no new signals today in any of them but since I hate being without something to stress me out I bought into the most positive looking, i.e. EURUSD when it pulled back towards yesterday’s close at 1.1906. I subsequently watched it drift immediately and smoothly down to a 50+ pips minus, saying to myself all day leave it, leave it, leave it. (remember I am an ex- day trader!) and my fingers are numb from sitting on them - and then it rallied straight back up and I am now looking at a magnificent 2 pip profit as I write! :smiley: :smiley: . I will leave it now til closing time and close it for the weekend regardless - but I suspect it will be a loss on this one as there is little sign of further follow-through enthusiasm on the upside - but the method is still long and that was why I took it so…

42

After reviewing the plan and your questions (Clint), I was able to follow CaptGrumpy, with the exception of closing the trade before the next candle…though I haven’t tried this, I’m fairly certain that the small, but sharp peak doesn’t form until after the next candle is created. If that following candle continued the trend, it wouldn’t bend the other way. For this reason, I think the method must be thoroughly reviewed before implementing. And, the lack of actual hard backtesting data, is also another cause for caution. Any trading method that appears to eliminate lost trades must be highly scrutinized. We’d all like to find it, but I’m not sure it exists.

43

I am still learning and I love this Thread. Thank you to all who have contributed.

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44

This chart has become choppy. I think the WMA lines need to be included to make a good decision about staying in or getting out.

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45

I don’t think anyone is asserting that the method eliminates losing trades DC, just that it may offer a reasonable probability entry, if a trend is likely to follow. Another advantage is that it gives you an unambiguous exit signal, and possibly a SAR opportunity

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46

Thank you for saying so! :slight_smile:
I hope that this thread will continue to be professional, and worthwhile to others regardless of the outcome regarding the method itself! :slight_smile:

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47

Lol - I think you’re right with that direction Simon, But I think we will have a retest of the lows first and I’m short at 1.1909 and 1.1896. that down move earlier got within 6 pips of my TP on both bets and conicided with a retest of the last swing highs prior to the upside move. (I would probably have closed one if I hadn’t been out at the time ! That may indeed have been the retest I speak of, but my inclination is to leave the bets on until the market tells me I’m right or wrong. If I’m right, I shall reverse and take 2 or 3 long positions for a retest of the highs and leave at least 1 position, to run for 1.2000. (Demo account only atm because I don’t know Forex very well yet) - but my positions have stops in place and will be left over the weekend.

(Sorry to move away from the subject here, :flushed: - just the coincidence of our positions I guess)

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48

Early reports in the thread indicated some very nice pip gains with the lowest trade being on +40PIPs. I took that to mean no losses and only gains. Hence, my short posts.

49

Hello Falstaff–Glad to see you have some interest inn my simple plan.I can assure you this isn’t the holy grail,but it is a bit different and it looks like it may have some promise–Clint’s testing should
prove or disprove this.AS a natural contrarian I can appreciate your reluctance to accept this plan without some proof it works.This is so new to me also that I haven’t done anything much except some
back testing on several charts–.Because the results were pretty good I posted it so other traders might be interested enough to try it out–it seems at least a few took the bate --as a result there is now extensive testing being done by Clint-and maybe othersI
I along with others am looking forward to what I think will be
positive results.I too consider myself to be a contrarian --that s why I
looked for a different approach to this Fx trading.I would really like to see you try this plan as I presented it --do paper trading only for a good period of time–a month or so…Oh, since posting
this plan I have experimented with changing the WMA5 to WMA2–I find it much better and gives much better prices…If you compare these two WMA’s I think you’ll agree the WMA2
is best…Glad to have you on board !!!

50

Thank you DC for your contribution here, every thought is valuable at this stage! :slight_smile:

This issue of when to physically respond to a signal is extremely revelant and we need to clarify this.

My own opinion is that, intraweek, Mon-Fri, it is not really relevant if we enter a trade just prior to close, just after close, or even the following morning. I say this because we are talking of daily MA’s and long term trends that may continue for days or weeks or even (unlikely) months. In which case a few tens of pips is really not so very relevant when we are looking for results in hundreds of pips.

However, as @clint mentions, this is an important issue on Friday closes with the closed weekend ahead. My opinion again is that any already open positions should be left regardless of the weekend because the method rules do not include that factor (nor does backtesting).

But if new signals appear on the close on Friday then it is a different matter. In this particular situation then we have to decide are we guided by commonsense or compliance? Commonsense says that we would be leaving a position open that is currently roughly at par for two days with markets closed - during which anything could happen, and also that markets often close a possible weekend gap anyway on the following monday. Therefore commonsense says leave the entry position until Monday. But compliance says enter on the Friday signal! Personally, I always go by commonsense rather than compliance with a set of untested rules…the worst that can happen is that you miss some pips off a trade!!!

Regarding the signal validity, I don’t really think it makes much difference whether you enter 15 min before the close or 15 mins after…or even the next morning. We are talking about a five day MA and, although it does “repaint” throughout the day, I very much doubt that its angle would change in the last hour unless there was a very big move taking place - and the colour of the HA block should also change also which is also very unlikely in the last moments of the current candle.

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[quote=“Clint, post:38, topic:122057”]
Grumpy and I seem to have had some confusion about whether… [/quote]
Haha!!! Serious as I am about trading (and I mean really serious!) I have to say I can’t help thinking of Snow White and the Seven Dwarfs here! :smiley:

If I claim rights to being “Dopey” due to my username, which of the remaining seven dwarfs do you lay claim to??? :wink:

…or will we rather turn out to be part of the “Magnificent Seven” even though Clint wasn’t there at the time? :slight_smile:

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Wow! I just got a “warning” forum pop-up that:

"This topic is clearly important to you – you’ve posted more than 30% of the replies here.
Are you sure you’re providing adequate time for other people to share their points of view, too?"

I’d better shut up now! I’ll just add that since there is no turn on the EURUSD 5 LWMA and the HA is still plus and I am only a few pips minus I am keeping my long position open over the weekend. With the sweating that that will give me I can skip sauna tomorrow evening!

Sincere thanks to everyone for a really interesting and useful week and best wishes for a peaceful and happy weekend! :smiley:

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53

Ignore that warning, Dopey.

I just got my own warning:

Let others join the conversation

This topic is clearly important to you – you’ve posted more than 25% of the replies here.

Are you sure you’re providing adequate time for other people to share their points of view, too?

Hey, Mods

Back off, please.

We are more than capable of policing our own thread (if it ever needs policing!)

And, by the way, it’s INFINITE SCROLLING, remember?

So, there’s INFINITE SPACE AND TIME for everyone to have their say.

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54

I agree @Clint - SOme are leaders in this thread, some of us are learning (well we’re All learning) - but we’re only too happy with the way the thread is going and would encourage yourself and @Simple_Simon to ignore the thought police “Auto actions”. We chime in when we have something to say and we’re very happy with the work that you are putting in. It’s great to have excellent and thoughtful leaders - Well “Leading” :slight_smile:

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Friday was a big day for news, both economic and political.

The big plunge in the USD/CAD was not USD weakness – it was strength in the CAD following extremely strong economic numbers (employment change, unemployment rate, and GDP m/m) reported at 8:30 am (New York time).

The plunge in USD just after 11 am (NY time) was due to the political news that General Michael Flynn has agreed to cooperate with Robert Mueller’s investigation of Trump/Russia collusion. This is a tempest in a teapot, but it roiled the markets (including the US stock markets), in no small part because of gleeful pot-stirring by the mainstream media.

All this will be over by next week, but the damage has been done to my test of the Grumpy Strategy.

Much wider stop-losses would have prevented the stop-outs that occurred today, but that can be said in any scenario in which a stop-out is followed by a return to trend. So, I don’t think today’s crazy activity sheds much light on the question of where, exactly, to place stops for the best results in this strategy.

That being said, I think placing 100-pip trailing stops on all pairs (except the USD/minor pairs, which need more room) has strangled several trades. So, I have changed all my stops (except the minors) to fixed 100-pip stops (no trail).

My brand-new USD/MXN long, entered just yesterday after 5 pm, got stopped out in the 11 am USD-plunge today. This pair is weird, and maybe I should remove it from my watch-list. The daily ATR(14) on the USD/MXN fluctuates between 1,700 and 2,000 pips – that’s not a misprint – average swings of up to 2,000 pips per day. I had a 1,500-pip stop-loss on the pair, and got nailed. The USD/MXN still looks like a good long entry, and looking at a normal (daily) candlestick chart, you might say, “So, what’s the big deal, just re-enter long”. But, I sure don’t want to take another 1,500-pip hit on this pair (or any pair). Maybe going commando (no stop-loss, at all) is the only solution for the buck/mex (and maybe the buck/yuan, as well).

Enough of the post-mortem.

Here are today’s metrics at the close:

Open trades from yesterday (Thursday, November 30) - 10 trades
(out of 20 trades that were open 24 hrs ago)

EUR/USD (long) - previous cross
AUD/USD (short) - crossed
NZD/USD (short) - crossed

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

Unrealized P/L = 170 pips profit
(prior to adding new trades signaled today or Sunday)

Closed trades (since yesterday) - 10 trades

USD/CAD (long) - stopped out
USD/CHF (long) - stopped out
USD/JPY (long) - stopped out
EUR/JPY (long) - stopped out
EUR/NZD (long) - stopped out
GBP/CHF (long) - stopped out
GBP/JPY (long) - stopped out
GBP/NZD (long) - stopped out
USD/CNH (long) - stopped out
USD/MXN (long) - stopped out

Realized P/L = 371.6 pips profit (since the start of this test)

New trades signaled today (Friday, December 1) - 2 trades
(trades will be placed at the Monday open - 5 pm Sunday NY time)

AUD/USD — SAR signal to go long
NZD/USD — WMA5 signal to go long

The rest of the pairs will be reviewed for signals on Sunday.

Current status of this test: 10 open positions
(trades will be held open over the weekend)

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56

You guys are awesome. This is great content and again, I am super appreciative of the analysis and trade specifics. As a newbie, all of this is very helpful.

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Cap’n grumpy - I seriously believe you have hit on something here which may turn out to be someting special - something I may actually trade with a micro account for a while, before funding it properly ! :sunglasses:

Just at the moment though, my demo account is devoted to another system I’m looking at, which also started last week and I don’t want what I believe will be positive results from your system, to confuse the account and cover any shortfalls in the other system.

[Edit - Why don’t you trade it yourself and report back your own findings ? :relaxed: ]

58

simple simon–Hello–I suspect you chose your user name very
carefully to create a false impression of the real you–“dopey” you ain’t!
It seems we are not on the same page about some thing(s).
So I will briefly run over the plan which should clear up any misunderstanding:
Heikin -Ashi candles—WMA5 And WMA12–Chart at maximum
resolution (or very close to max.)
when WMA5 makes a small peak as it changes direction
as the heikin ashi candles (now blocks)change color indicating the chart has reversed direction…this small peak I called a TP (trade point)–Because the TP could be confused with TP for
take profit–I now call this a PTP (potential trade point) When a trade is opened at a TPT–follow the WMA5 --IF IT CLEARLY crosses
the WMA12–keep following the WMA5, and chart lines,until the next PTP occurs–close the open trade—NOW THAT the chart has
reversed direction---- WITH THIS PLan because the chart HAS already reversed a new trade is opened in the new chart direction–again the WMA5 is followed— ,IF IT CLEARLY CROSSES THE wma12 follow it to the next PTP where the
open trade is closed and a new trade immediately opened–follow theWMA5-----as before…
IF THE WMA5 DOES NOT clearly cross the WMA12 --the open trade is closed and now wait for the next PTP to open a new trade
When the PTP is spotted the trade is made at the close of the candle ,or block,where the trade is indicated (closing time here
in Ontario is at 00.00 hours (EST) so trades are done between
2345 and 0000 hours–Clint said closing time for him is 1700 hours so I don’t know how this would affect trading with this plan)
Oh yes, I am referring to oanda Fx trade charts and platform.
I think that covers everything in the original post.Since that post
I have been experimenting with using A WMA2 in place of the WMA5. I find it better–it shows up sharper and gives better prices than the WMA5–I’d suggest you check them both out–paper trading only for a while–
Statement:: When a PTP occurs it ALWAYS indicates a potential trade
,however not every trade indicated by the PTP qualifies for a
trade–Things such as the trend and most important where the WMA12 is in relation to the main chart–when it moves away from the main chart it means the chart in on a definate run and
will remain on the run until the next PTP–If the WMA12 is quite far from the main chart at time of the PTP it is very likely the chart will not reverse at this time…If the PTP occurs in the top or bottom 25% of the chart trades are made anyway–So if you are
convinced the chart will not reverse --no trades are done–just wait for the next PTP to make trades—Now here it is very possible the chart may reverse for a while before continuing on it’s run–if this happens–
no sweat–you have some potential built up profit (PBUP from the run you are on)) so
you can wait out the reversal up until about 3/4 of the PBUP is
gone before the open trade should be closed–if the trade has to be closed, all is not lost–you still have some of the PBUP put
in your account and there really was no actual loss on that trade.If the trade resumes it’s original run just follow it to the next PTPTP to make trades…This was more than I intended to write but it should give you a better understanding about this plan—hopefully we can both be on the same page now…
Regards and good trading…

59

I am analyzing both the WMA 2 and WMA 5. Ending the week, the GBP/AUD completed daily candle had the WMA 2 peak pointed down while the WMA 5 peak pointed up. The regular Japanese candle ended as a short and the HA candle was still long. Left to my own devices, I would not enter a trade when the two are pointing in opposite directions and the regular and HA candles are at odds with each other. Is this the correct approach in this case? Which MA direction is more likely to be correct? We don’t know. So, I am out for this pair.

With all three of the WMAs plotted on the daily chart, I am looking to trade only when all three are pointing in the same direction. Yes, this is very conservative, but it’s the way I roll, even if entries are sometimes lagging. Also, I look to close a trade when the 2 crosses the 5 in the opposite direction.

Comments?

60

When you say “peak” are you referring to the slope?

I just looked at this and I am wondering are you using a 2 LWMA based on the actual close prices or the HA close prices? Because these gave different answers on the Friday close, IMHO, we should be basing these LWMAs on the HA closes and not the market closes, but, after Grumpy’s post to me above, I am not sure if I have understood anything here! :smiley:

The top chart shows the 2WMA based on actual closes and the bottom chart shows the 2WMA based on HA close (which is (O+H+L+C)/4). According to the lower chart this move is uninterrupted by any change?

HA 1201 GBPAUD D.png498×858 9.02 KB