Heikin Ashi with Moving Averages, that is a pure trend following forex trading strategy. This trading system is based on the Heikin Ashi coloured candles filtered by moving averages.
Setup
Heikin Ashi chart.
Simple Moving Average 11 periods, median.
Simple Moving Average 50 periods, median.
MACD (9,21,9)
Trading Rules Heikin Ashi with Moving Averages
Buy
Heikin Ashi green candle.
Heikin Ashi candle close above 11 SMA.
Heikin Ashi candle close above 50 SMA.
Exit Buy
Heikin Ashi candle close below 11 SMA.
Sell
Heikin Ashi red candle.
Heikin Ashi candle close below 11 SMA.
Heikin Ashi candle close below 50 SMA.
Exit Buy
Heikin Ashi candle close above 11 SMA.
Max two trades in the same direction.
Place initial stop loss at the previous swing High/low.
You can also apply trailing stops and break even stops.
Important
Note. Option: only 1 trade in the same direction(very reliable conservative choice especially when you have many currency pairs available to choose a trade).
In the examples we use the option to make only 1 trade in the same direction. You need more charts of currency pairs but it has been observed that the second entry or more in the same direction has a low profitability than the first, which is why I recommend this option.
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