Heiken Ashi with non lag dot Strategy For MT4
Table Of Contents:
- Heiken Ashi with non lag dot Strategy For MT4
- Call option setup
- Put option setup
- Managing the trades
Please note: This strategy was publicly published in the trading community and is free to use. We do NOT make an attempt to decide if this strategy is profitable or not, because we know that the major factors regarding trading results are the skills/experience of the trader who executes the strategy. Therefore, we are mainly explaining the components and rules of the strategy. If applicable, we are highlighting advantages, disadvantages and possible improvements of the strategy.
The Heiken Ashi with non lag dot Strategy For MT4 is a favorite trading method for the trend lovers. Those who are studying the indicators for a long period knows the complexities with the repainting or lagging indicators.
Even the robust and expensive trading edge is subject to vigorous assessment due to the lagging property of the system. But this system will be dynamic and you don’t have to face any lagging issues. Emilio superb and, Bollinger Bands squeeze magenta dot flat market, EMA 11, and EMA 55 is used as an indicator. The EMAs are being used to ascertain the direction of the trend.
In short, when the price is loitering above the EMA, we have an uptrend. If not, we have a downtrend in action. As the EMAs are very reactive to the price movement, it becomes hassle-free when you locate the setup in the lower chart. Moreover, the color of the Heiken Ashi candle with non-lag dot gives us the ultimate power to take the trade without losing too much money.
But no system in the world is perfect, as the market shift occurs based on investor’s sentiment. So, expecting a 100% win rate suggest that you are not prepared to trade the options market. Assuming that you know losses are common, you should use this method as it can give you more than an 80% win rate in the standard market condition.
This means, you should be able to select the stable asset but for now, let’s see how to use this edge. We will discuss the process of selecting the asset in the trade management segment.
Call option setup
The support band indicator is like an extreme level identifier. Usually, the price tends to rebound after it reaches the super band region. So, when the price is heading to the south part of the Emilio super band, we must be alert that the potential bullish reversal is going to take place in the asset.
The first thing to notice is the color of the Heiken Ashi bar. The color will change from red to white when the price is ready to move up. The EMA cross should take place during the transition of the Heiken Ashi color. The goldenrod color EMA (11) will go cross over the medium violet EMA (55) in the daily chart. This cross tells us the market is ready to make an upward movement. Wait for the color to change to the white.
A blue dot should appear below the Heiken Ashi white bar. Wait for the green bar in the BB squeeze indicator and you can take the long trade. Some of the traders often use the visual examination of the support level as it gives more authority to the trade setup.
Note that the system needs to be used in the 1 minute, 5 m, and 30-minute time frame only. The expiry period should be less than 10 minutes. In case, you wish to take the trade in the hourly or higher time frame, it is recommended to learn the PA pattern. And the expiry should not exceed 4 hours.
Put option setup
The same principle is used for the put option. But we will describe the method with some twist so that you get more authority on the trade signals. You should wait till the price hits approaches to the Emilio band upper zone. The upper zone in the BB squeeze tells you that the price will go for a decent drop.
As the price approaches, the colors in the Heiken Ashi bar will changes from white to red. The shift in color is the most important. If you notice a significant delay in the shift in the color while the price is still dropping, you should consider the drop as a corrective movement. So, taking any short at the corrective movement is going to be a big mistake.
The 11 EMA which is goldenrod in color will cross below the 55 EMA and it will give us the indication that the price is ready to fall. Finally, take a look at the BB squeeze bar. If it is red and the position is below the zero lines, you can short the asset with proper risk exposure. This is where most people make the mistake. They think the system is immune to losing trades and they won’t have to deal with stress.
As they win more, they tend to increase the risk slowly which eventually impose a great threat to the trader's career. Even the elite option traders prefer not risking more than 1% while using this system. The reason to use the conservative method is the reactive nature of the EMAs. Let’s learn more in the trade managing segment to manage the running trades more efficiently.
Managing the trades
The first rule for using this method is to keep the risk exposure constant. You can’t risk more than 1% even though can increase the win rate by taking PA into the analytical process. But for the safety of your trading capital, the trader who has less than 3 years of experience should strictly follow the rules.
Regarding the selection of the asset, the traders are advised to take the trades in the stable market. That means you can’t open any trade 1 hour before or after the major news. Let the market absorb rumors and real data. Closely analyze the spikes in the historic data and you will notice the spikes are the result of the rumors and major news.
As your trade will deal with tight expiry, you can’t afford to manage the trades in such market conditions. When the traders are taken in stocks or indices, you must be careful about the session. The best session to trade stocks and indices is the London and the New York trading session.
It gives you enough volatility to cover the spread and make a unique profit. The broker's payout is well when the volatility is decent. So, chose the asset based on market state and trading hours. It might take a while to adjust to the new sets of rules but you always have the option to practice in the paper trading account to develop your skill and confidence.
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Partially Automated Trading Besides Your Day Job
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