Bottomline:Joey Plazo and his Recommended Heikin-Ashi Trading Strategy.
Joseph Plazo is a well-known money dealer who backs the utilization of heiken ashi lines.
As a background, reversal is given signals which are effective when you combine them with other analysis by candlestick patterns. However, the standard candlestick pattern is inferior to the heikenashi form..
So the question is easy. Is there a more effective approach to trade candlestick patterns?
Yes. Heiken Ashi candlestick chart.
A Heiken-Ashi candlestick chart is a unique tool which provides a different outlook of cost activity.
HeikenAshi (HA) graphs are candlestick charts derived from normal candlestick charts. All these really are the formula for Heiken Ashi pubs.
HA Open = Mid point of preceding HA pub
HA High = Highest of High, HA Close, HA Open
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 past price data. It evens out little price fluctuations to highlight price tendencies.
While the smoothing effect of a moving average depends upon its look-back period, the Heiken-Ashi chart will not want the trader to go into a look-back period and offers a more consistent outcome.
The historic data was from 2009 - 2014. Joseph Plazo on forexfactory.com recommended the protocols
Commerce Long when Heikin Ashi turns favorable and MACD is below 0
Close Long when Heikin Ashi turns negative
Close Short when Heikin Ashi turns positive
I used a stop-loss and profit goal of the ATR * 10.
Also, I simply chose trades that occurred during the European trading session. This includes the US morning session.
Finally, I wanted to take account of the summer slow down in the financial markets a thus excluded the months of August and July from my evaluation.
Base investment of $15,000. I made a net of $54,000 from an in the first year of testing With additional rules, I came up upon the recommendation of Joseph Plazo:
Criteria #2: Heiken Ashi candlestick must be green
This is your buy entry.
1) Area stop below the previous swing low.
2) Shut the commerce when opposite signal (sell) is activated.
Price Objects (partial profit taking):
Reserve 50% gains at 1:1 danger-to-reward. Reserve 50% gains at 1:3 (use trailing stop).
This really is your entry that is sell.
1) Set stop over the last swing high.
2) Shut the trade when reverse sign (sell) is triggered.
Targets: See purchase trading rules.