Greetings to you, dear readers of ForTrader.org Trader Magazine. Today I would like to consider with you one trending strategy called Heiken Ashi Smoothed and Bbsqueeze Trading. If my memory fails me, the strategy of Heiken Ashi Smoothed and Bbsqueeze Trading hails from 2011, although it was again seen in the foreign segment in 2014. It was actively discussed in various forums, but it was not lit up in the hands of domestic traders. Although the strategy is a bit old, we will try to analyze it and find ways to improve it.
Input parameters
- Currency pairs: any
- Timeframe: from M30 and older
- Trading time: round the clock
- Type of strategy: trending, indicator
Setting a Heiken Ashi Smoothed and Bbsqueeze Trading Trading Strategy
The Heiken Ashi Smoothed and Bbsqueeze Trading trading strategy is set in the standard way. If you did everything correctly, the desktop of your terminal should look something like this:
Indicators Used
The trading system consists of five indicators. Now let’s briefly each:
Moving Average is a standard trend indicator of the MetaTrader 4 platform. The strategy uses two moving averages with a period of 21 (black) and a period of 7 (white). The strategy performs the function of determining the trend. If a moving one with a period of 7 over a moving one with a period of 21, then the trend is bullish, if on the contrary, the trend is bearish. The intersection of the moving ones is also important, which is a signal of a change in the market trend.
1_Skdon_trend_sig — this indicator is displayed as blue and red bars above and below the price. The indicator is based on a simple moving average with a period of 21. In the strategy, the indicator is a signal, as it draws us the blue and red arrows up and down. The moving parameter can be changed, making signals earlier or delayed, thus optimizing the strategy for your trading style.
SDX-TzPivots — this indicator draws us pivot levels in the form of dashed lines. The strategy can be used as an assistant to determine goals, as well as profit.
Cynthia BBsqueeze — the indicator is in the first additional window in the form of a histogram of different colors. In the settings you can only specify the number of bars, on the basis of which the indicator calculates its readings. In a trading strategy, it acts as a filter.
RSX — this indicator is also located in the first additional window and is displayed as a pink and green line. In fact, the indicator is a graphic modification of the standard RSI oscillator with parameter 14. Parameters can be optimized at your discretion, like the standard RSI.
Having examined all the indicators in detail, I came to the conclusion that the strategy, in fact, consists of standard and long-known indicators. All settings are open, which gives us the opportunity to reconfigure the strategy for the current trading conditions.
Heiken Ashi Smoothed and Bbsqueeze Trading Trading Strategy Signals for a Buy
We enter the purchase subject to a number of conditions:
- The 1_Skdon_trend_sig indicator draws a blue up arrow. The bars are blue.
- A moving average with a period of 7 (white) is above the moving average with a period of 21, or there is an intersection of a moving average with a period of 21 moving with a period of 7 from the bottom up.
- The histogram of the Cynthia BBsqueeze indicator is blue.
- The RSX indicator line is green.
Heiken Ashi Smoothed and Bbsqueeze Trading Trading Strategy Signals for Sale
We enter the sale subject to a number of conditions:
- The 1_Skdon_trend_sig indicator draws a red down arrow. The bars are red.
- A moving average with a period of 7 (white) is below the moving average with a period of 21, or there is an intersection of a moving average with a period of 21 moving with a period of 7 from top to bottom.
- Bar graph of the Cynthia BBsqueeze indicator in purple.
- The RSX indicator line is pink.
Money management
You may find this stupid, but as my practice shows, an experienced trader is not the one who has been engaged in trading for a long time, but the one who correctly uses money management. Since there will be few signals to enter a position, I recommend not to exceed the risk by one position more than three percent of the deposit.
Personal opinion of the author of the article
The trend trading strategy of Heiken Ashi Smoothed and Bbsqueeze Trading does not have complicated entry rules and a bunch of unnecessary indicators, all indicators are correctly selected. Also, we can not but rejoice at a clear definition of the trend using moving averages. The settings of all indicators are open, which allows more or less knowledgeable traders to optimize the strategy for their trading style. I recommend the strategy for both beginners and pros. A passing trend, and do not forget to share your impressions in the comments.