I've personally considered experimenting with candlesticks in different ways for a while, but I hadn't realized that there was one already. Have you used Hekin Ashi, and what is your experience with it? Also, what is your experience before using Heikin Ashi as well as your trading type? Thanks for your help.
IME, Not too good, looks great on the left (like most of the esoteric stuff floating out there) but not of much use on the right side
Remember that with Heiken-Ashi the candles you are seeing do not represent the actual prices. HA candles are derived by applying some formula to regular candles. They are good for showing trends, but not for showing actual prices. There's an article that was linked to here explaining why this can be bad, and why HA candles can give bad buy/sell signals. I'll try to find it and post it.
I use "smoothed" HA candlesticks for a new trade method I have recently developed.....I really like these candlesticks for how I use them. Some reference material....... http://www.ninjatrader-support.com/vb/showthread.php?p=30424 http://www.affordableindicators.com/ http://forum.esignalcentral.com/showthread.php?threadid=9886&perpage=15&pagenumber=1 http://www.weboma.com/what-is-heikin-ashi-and-how-to-trade-with-it/ Hope this helps!
Friday / November 1, 2019 / 1:55 p.m. PST The thing I like about Heiken Ashi Candlesticks (inside the black box in the image below) is their smooth progression and especially how their color remains consistent as price continues to rise or throughout any downward phase. But what I definitely do not like about them is that they mask the actual opening and closing price levels during each time interval they represent, as conveyed by the empty/unfilled red and blue rectangles Long ago, I thought a zero-lag moving average might make a nice replacement for the candlesticks, but as illustrated by the purple line/indicator, though better than standard moving averages, even zero-lag moving averages stink (from my perspective). I therefore coded my own "instantaneous" moving average that gave me the same smooth progression as Heiken Ashi Candlesticks (the black moving average) so that I could plot regular candlesticks on my charts, but still have a smooth visual representation that remains consistent as price continues to rise or throughout any downward phase.
The thing about H-A is that even if you base your indicators off of its' closing value, you are still sampling once per day. The H-A close is the arithmetic mean of the OHLC, but is still just one sample per day. I'm not getting into Shannon information or Nyquist theory in this post, but wether you use an arithmetic mean, harmonic mean, or geometric mean of the OHLC it doesn't really add any value to your indicators over just using the close itself.
Open, High, Low, Close... they are all pretty irrelevant to me. I'm just interested in the general flow of price. I'm an intraday trader so the instantaneous moving average on a daily chart merely serves to inform me as to whether price is more than likely still rising or falling overall. Simply looking at the close does not do that for me personally. The movements are just too helter-skelter, disorderly and confusing. Moreover, to decide whether I want to execute a trade, I drop down to the 60-, 15-, and five-minute charts. I never trade off a single candlestick anyway. If I were a swing trader using daily charts I would probably plot my Heiken Ashi replacement indicator on weekly or monthly charts. I'm an incredibly simple guy, so information theory doesn't really intrigue me. All I want to know is, am I seeing price rising or falling? My approach to trading is not much more complicated than that.
expiated, Just curious if you trade the slope of the ITL directly, or wait for a bar to change color and only then enter in the direction of the slope? Example: wait to go long on a red bar when the slope of the ITL is still positive. How about your exit rules?
Have one sys automated using H.A., it been trading several years, nice for define trend, reduces signals, but have to have wide stops. Trend for this does not turn on first color change, but by so many in a row, and when it does, system reverses if was positioned other way. Use an only target to dump 50% and let rest roll. Does have drawdowns like anything else, and I always am hedged on 30 minute TF and up.
This is why I have to drop down to a lower time frame. It's also why I cannot automate my systems. I can pretty much avoid drawndown trading manually, but I'm not a sophisticated enough coder to create an automated system that can do the same, and any coder who could, if existing, is sure to be too expensive for my budget/expense account.