Heiken Ashi and ATR for Conformation....

[md2324 10]

To keep me in the trade.

 

I am trying to find an indicator or even a set of Indicators, to help Keep me in my trades.

 

A quick Summary.... I entered Short, on the EUR/USD back around the first week of May of this year ( 2014 ) based on the Weekly chart.

Well, from that point, until now, it has plummeted in pricem which was my initial thought when I went short back in May.

What happened was, it consolidated from June - the end of July, and of course, I tightened my stop, and was taken out of the trade, and then wham, the EUR/USD just tanks, and I miss all of that drop ( profit in Pips )

 

Looking back, I am trying to find a way, that I can avoid getting " Nervous " and tightening my stop and getting taken out of a trade again, right before a huge move.

 

I have been looking at Heiken Ashi and the ATR indicators, to use as a basis for leaving my stops more " Lose "

 

I trade on higher Timeframes usually ( Weekly charts, where each candle represents 1 weeks worth of trading ).

So given that, what would be a good setting to use on the ATR ( a 14, 21 or a higher lookback setting ? )

And what is a good guideline when using the Heiken Ashi, to help confirm a strong trend, that also filters out a majority of any whipsaw ?

I have heard that if your Short in a trade, some traders will tighten their stop or even exit the trade, if you get 3 consecutive Blue bars ( representing Buying strength )

 

Thank you for any insight and help.

I just can't stand to be on the sidelines on such a big move, when my initial entry was correct, but I let a consolidation of price make me nervous and I then miss all of those Pips

 

Thanks again

[tradingwizzard 10]

not really fond of Heiken Ashi....

 

TW

[zdo 20]

md2324,

 

fact-toid: Ordinary HA has the ‘result equivalent’ of an EMA

 

stat-toid: Given their apparent attributes, applying an ATR might have saved your position in that particular situation but, across a large sample, chandelier (and other close neighbor atr type) trailing stop strats perform worse than expected …

Ie it ‘looks like’ atr methods should achieve the proper results - but they really don’t

 

To make (automated) risk management approach much more dynamic, I combined

1) trailing stop algorithms based on price action

and

interbar ‘lap size’ (instead of bar size)

and

(only a minor component) actual range (instead of ATR),etc.

 

with

 

2) increasing and decreasing the ‘aggressiveness’ of the approach of the trailing stop based on counts of waves (not ewave counts btw)… for the effect of stop staying away from price the first swings/waves (and / or congestions - like in your case) of an FX trend then progressively ‘diving in’ closer to the price action in later swings of a move…

(*btw, different 'dynamics' and parameters applied to trailing stops for index and ag trading... etc)

 

hth

[zdo 20]

… also you might want to check Vervoort modifications of atr trailingstops