while in no way connected with steinmetz, I have used Heiken-Ashi for many many years now,
although WITH some provisos that MAY change some results !
Please understand that HA is a "trend following" system and it is wonderful for that purpose, but it is based on AVERAGING the preceeding candles with the newest one, and not simply working on high, low and close --- this averaging takes TIME, which is why HA "LAGS" the market and can easily MISS YOUR EXIT POINT ! (simply because, once HA shows a reversal in place, the reversal actually happened WAY BACK THERE A BIT !) Using the "line chart" option on prefs for MT4 charts does provide you with a signal line that is FASTER than the bar reversals, but it doesnt tell you at WHAT price to exit !
this appears to be a newer version of his indicator/EA than im used to and is SLOWER than the original which probably cuts down on "whippiness", but DOES create larger DRAWDOWNS because it also reverses slower !
THAT SAID, HA's biggest problem as a system is the drawdowns, as each candle (especially on something like GU) can represent a TREMENDOUS up and downside range, especially in the higher timeframes such as H1 and H4)
For HA to work as a standalone, two things must be added to the method that history has shown as needed --- first you must have a VERY accurate method of exiting (and catching reversals) that HA cannot show in its present state and if you use it, you MUST MAINTAIN EXCELLENT MONEY MANAGEMENT TECHNIQUES.
Now, this raises a difficult quandry and leads to many a blown account --- to make "real" money, you need a LARGER account, so that you can trade a decent lot size without endangering your margin. If youre trading a small account, the slowness of profit building leads you into doing some rash things with your account, namely trading too large !
IMO, the HA system works, but with the two provisos I put forth to protect your account.
finding tops and bottoms and exits and entrances is pretty easy in this day and age, but keeping down your greed and trading too large is something only you and your mind can control !
Oh, one last thing and I shall get much flack for this, but
I would NEVER trade with a stop loss on this method due to drawdown dangers wiping you out, which im sure has happened to many people using the system and which is one, if not the main reason, for its disfavor !
Stop losses and the LRC are two of my main posting discussions concerning forex, while the LRC is of UTMOST importance to trend trading, and using stop losses MOST dangerous to your account !
One last "proviso" i edited in --- if youre looking for a currency to trade this way, use your H4 or daily chart and look for the SMOOTHEST AND SMALLEST CANDLES you can find --- this will quarantee you the smallest amount of drawdowns, and "could" allow you to raise your stake a small bit, as opposed to something that loves jumping around, like GU !
I imagine I will hear something on this subject, but also glad to explain fully !
your humble servant
mp
Quote:
Originally Posted by zupcon
Look at any of the statements out in the public domain provided by people who actually spent time testing. There isn't a single independent test that is successful. There's a whole bunch of blown accounts, now why is that ?
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