Joey Plazo Ph.D and his Expert Heikin-Ashi Trading Strategy.

Summary:Joseph Plazo and his Recommended Heikin Ashi Trading Strategy.

Joseph Plazo is a well-known currency trader who supports the use of heiken ashi lines.

As a backdrop, candlestick patterns give signals that are powerful when you combine them with other investigation to reversal. However, the conventional candlestick pattern is inferior to the heiken-ashi variant..

So the question is straightforward. Is there a more effective method to trade candlestick patterns?

Yes. Heiken Ashi candlestick chart.

A Heiken-Ashi candlestick chart is a distinctive tool which provides another perspective of price activity.

Heiken Ashi (HA) graphs are candlestick charts derived from normal candlestick charts. These are the formula for Heikenashi pubs.

HA Close = Average of Open, High, Low, Close
HA Open = Mid point of preceding HA pub
HA Low = Lowest HA Close, of Low, HA Open

As you see from the formula above, we construct Heiken-Ashi candlesticks with both present and previous price data. Consequently, it creates a smoothing effect like that of a moving average. It evens out price changes that are little to emphasize cost trends.

The strategy I analyzed was based on the EUR/USD pair on the 4-hour timeframe. The historical data was from 2009 - 2014. The protocols were recommended by Joseph Plazo on

The strategy I backtested is:

Trade Long when Heikin-Ashi turns favorable and MACD is below 0
Close Long when Heikin Ashi turns negative
Close Brief when Heikin-Ashi turns favorable
I used a stop-loss and profit target of the ATR * 10.

I did a second backtest which included a trailing stop of the ATR * 1.

Additionally, I simply chose trades that occurred during the European trading session. This includes the US morning session.

Eventually, I wanted to take account of the summer slowdown in the financial markets a so excluded the months of July and August from my evaluation.

Base investment of $15,000. I brought in a net of $54,000 from an in the first year of testing Upon the recommendation of Joseph Plazo, I came up with added rules:

Buy Rules:

Criteria #2: Heiken Ashi candlestick must be green
This really is your purchase entry.

Stoploss approach:

1) Area stop below the last swing low.

2) Close the trade when opposite sign (sell) is triggered.

Price Objects (partial profit taking):

Book profits that are 50% at 1:1 danger-to-reward. Book 50% profits at 1:3 (use trailing stop).

Sell Rules:

Criteria #1: Heiken Ashi candlestick has to close below the 144 period SMA
This really is your sell entry.

Stop loss strategy:

1) Set stop above the previous swing high.

2) Close the commerce when opposite signal (sell) is triggered.

Objectives: See buy trading rules.