Heikin Ashi Trading Tools

Description

This package of tools based on the popular Heikin Ashi candles has been programmed by trader Helmut Schmidt who writes “The NanoTrader has been my companion for nearly 10 years. As a daytrader and a programmer qualified on Fipertec NanoTrader, I particularly value the the Tactic orders and Tactic buttons. When scalping I am particularly impressed with the extreme speed of the order entry and order execution.”

These Heikin Ashi tools are mainly used with range bars or in small time frames. Helmut Schmidt recommends to use the tool with range bars.

Suitable for	: Market indices (DAX, DOW, CAC...) : Forex (EUR/USD...) : Stocks : Commodities (gold, oil...)
Instruments	: Futures, CFD, stocks and forex
Trading type	: Day trading
Trading tempo	: Multiple signals every day

The Heikin Ashi tools package consists of 5 tools:

1 indicator + 1 filter + 1 trendchart + 2 stops.

Click here to buy the Heikin Ashi tools package in the store

The Heikin Ashi indicator

This first tool (HS_HeikinAshi_CD_Senti) allows traders to superimpose the Heikin Ashi candles on a traditional bar chart or line chart.

In addition this indicator calculates and displays the popular Donchian channel but ... it calculates the channel based on the Heikin Ashi candles instead of the traditional candles.

Heikin Ashi trading tools designed by Helmut Schmidt for the NanoTrader trading platform.

This example shows the Heikin Ashi candles superimposed on the bar chart. The Donchian channel is also visible.

This indicator can be used to generate trading signals. Traders can choose between two signals:

1. Trend reversal signals. When the Heikin Ashi candles change from red to green, a buy signal is given. When the Heikin Ashi candles change from green to red, a short sell signal is given.

2. Divergence signals. When the bar chart is positive (bullish) and the Heikin Ashi candle is still negative (bearish), a buy signal is given. When the bar chart is negative (bearish) and the Heikin Ashi candle is still positive (bullish), a short sell signal is given.

The Donchian channel can be used to limit the number of signals. Buy signals will only occur if the channel is green. Short sell signals will only occur if the channel is red.

Buy signals based on Heikin Ashi candles.

This example shows 5 buy signals within a green Donchian channel.

The Heikin Ashi Donchian channel filter

This trend filter (HS_HeikinAshi_DC_Filter) colours the background of the chart in function of the Heikin Ashi-based Donchian channel. Green, when the channel is bullish. Red, when the channel is bearish. The filter can also be set as a counter trend indicator.

A Donchian channel based on Heikin Ashi candles.

This example shows the trend based on the Heikin Ashi-based Donchian channel.

The Heikin Ashi Trendchart

The package displays this chart below the main chart. The background colour of the chart is determined by the strength of the momentum of the market movement. Momentum is considered strong when a green Heikin Ashi candle does not have a shadow at its bottom or when a red Heikin Ashi candle does not have a shadow at its top. If the momentum is strong, the background of the chart will change colour and become darker. The Heikin Ashi TrendChart is used as a visual aid.

The trend based on Heikin Ashi candles (charts).

This example shows the HeikinAshi Trendchart below the main chart. De dark zones indicate when the trend is strongest.

HS_HeikinAshi_DC_Senti_Bar_Stop

In the case of a long position this stop is automatically placed on the low of the previous Heikin Ashi candle (+ or - a number of ticks selected by the user, if so desired).

In the case of a short sell position this stop is automatically placed on the high of the previous Heikin Ashi candle (+ or - a number of ticks selected by the user, if so desired).

A trailing stop based on the Heikin Ashi candles.

This example shows a long position protected by a stop based on the low of the previous Heikin Ashi candle.

HS_HeikinAshi_DC_periodsHighLow_Stop

In the case of a long position this stop always follows the bottom of the Heikin Ashi-based Donchian channel.

In the case of a short sell position this stop always follows the top of the Heikin Ashi-based Donchian channel.

This example shows a long position protected by a stop based on the bottom of the Heikin Ashi-based Donchian channel.

The Heikin Ashi tools package consists of 5 tools:

1 indicator + 1 filter + 1 trendchart + 2 stops.

Click here to buy the Heikin Ashi tools package in the store

Practical implementation

• Open a chart of the instrument you want to trade.

• Select the tools in the WHS Store folder.

As usual all changes in settings can be done directly in the chart or in the Designer Dialog window.

Criteria for a valid short sell signal in Aloys Mattijssen's trading strategy.

Open a chart, click the folder icon and select template studies.

Click here to buy the Heikin Ashi tools package in the store