If there is one thing that I would want to learn before I started trading, that would be to think in terms of probabilities. This is because trading is a probabilities game.
Seasoned traders understand that anything can happen when it comes to trading. Price may spike, reverse, trend and do whatever it wants to do. It does not follow what you and I, as individual traders, want it to do. Instead, it is the other way around. We try to understand what the market is trying to do and trade accordingly. How do we do this? We look for recurring patterns that tend to produce the same results more often than not. These patterns are not a 100% sure. It does not always follow that if the same pattern occurs, we are sure that price would move in the same way all the time. As traders, we should understand that we are playing a game of chance which has an edge in our advantage. Then, we allow the law of large numbers to play in our favor and allow us to be profitable over the long run.
One of the best ways to ensure a high probability setup is by looking for confluences and confirmations. Confluences means having multiple signals and indications that price is moving in a certain direction. Confirmations on the other hand simply provides a secondary indication confirming our prior assessment of what the market might do.
Heiken Ashi Trigger Forex Trading Strategy is a strategy that makes use of indicators that complement each other well. One indicator produces a high probability trend reversal indication, while the other confirms the setups with a momentum or trend signal.
Heiken Ashi Smoothed Indicator
Heiken Ashi Smoothed indicator is a trend following indicator which helps traders identify trend direction and trend reversals by overlaying bars on the price chart.
Heiken Ashi literally means “average bars” in Japanese. The Heiken Ashi Smoothed indicator is a variation of the Heiken Ashi Candlesticks indicator. However, although they share the same name and have the same concept of averaging out historical prices, they do differ a lot in how they are implemented.
The Heiken Ashi Candlesticks is basically a variation of how candlesticks are plotted. It retains the same high and low of each candlestick, while averaging out the open and close of each candle. This creates candlesticks that change colors only when the short-term trend has reversed.
The Heiken Ashi Smoothed indicator on the other hand resembles the Exponential Moving Average (EMA) more closely. It plots bars that change colors only when the trend has reversed, much like the Heiken Ashi Candlesticks. However, it responds to price movements more like a moving average line would.
The Heiken Ashi Smoothed indicator is an excellent trend following indicator. It is very reliable when indicating trends and trend reversals making it a great trend reversal signal indicator and a trend filter indicator.
Trend Trigger Factor
Trend Trigger Factor (TTF) or BT Trend Trigger is a trend following technical indicator which helps traders identify trend direction while at the same time confirm momentum as the trend picks up its pace.
TTF is an oscillator type of indicator which is displayed as a line that oscillates around zero. A positive TTF line generally indicates a bullish trend bias, while a negative TTF line indicates a bearish trend bias. The line oscillates smoothly like other oscillators.
Where this oscillator shine is in how it confirms that the trend has picked up momentum. It plots a horizontal line at +100 level whenever it detects a bullish trend. If the TTF line breaks above +100, we can confirm that the trend has gained a bullish momentum. On the other hand, if the indicator detects a bearish trend, the line would shift to -100. If the TTF line drops below -100, we can then confirm that the bearish trend has gained momentum.
This trading strategy on mid-term trend reversals that are aligned with the long-term trend. However, instead of taking trades as the trend reverses, it waits for a momentum signal to confirm a trade setup.
To identify the long-term trend, we will be using the 200 Exponential Moving Average (EMA) line. Trend direction is based on where price action is moving in relation to the 200 EMA line, as well as the slope of the 200 EMA line.
As soon as we identify the long-term trend, we then wait for the mid-term trend reversal signal using the Heiken Ashi Smoothed indicator. We will only be taking trend reversal signals that are congruent with the long-term trend.
Then, we confirm the momentum using the Trend Trigger Factor indicator. We do this by waiting on the TTF line to breach above +100 or drop below -100 depending on the direction of the trend.
- 200 EMA
- BTtrend Trigger
Preferred Time Frames: 30-minute, 1-hour, 4-hour and daily charts
Currency Pairs: FX majors, minors and crosses
Trading Sessions: Tokyo, London and New York sessions
Buy Trade Setup
- Price action should be above the 200 EMA line.
- The 200 EMA line should slope up.
- The Heiken Ashi Smoothed bars should change to lime.
- The TTF line should break above +100.
- Enter a buy order upon the confirmation of these conditions.
- Set the stop loss below the Heiken Ashi Smoothed bar.
- Close the trade as soon as the Heiken Ashi Smoothed bar changes to red.
Sell Trade Setup
- Price action should be below the 200 EMA line.
- The 200 EMA line should slope down.
- The Heiken Ashi Smoothed bars should change to red.
- The TTF line should drop below -100.
- Enter a sell order upon the confirmation of these conditions.
- Set the stop loss above the Heiken Ashi Smoothed bar.
- Close the trade as soon as the Heiken Ashi Smoothed bar changes to lime.
This trading strategy works well in markets which have a strong tendency to trend and have clear market contraction and expansion cycles. This would usually allow traders to take a trade as momentum is picking up and ride the new trend until near its end.
However, there are also instances wherein the momentum confirmation of the TTF indicator comes a little late. In these scenarios, while there is still a high probability to profit, it is best to assess if the potential reward is still worth the risk. This is because price would most likely move in your favor but only for a while, then reverse. Check if there are any supports or resistances that price may bounce off of that would not benefit your trade.
Traders who could trade this strategy wisely and avoid taking trades with low rewards can benefit from this type of trading strategy.
Forex Trading Strategies Installation Instructions
Heiken Ashi Trigger Forex Trading Strategy is a combination of Metatrader 4 (MT4) indicator(s) and template.
The essence of this forex strategy is to transform the accumulated history data and trading signals.
Heiken Ashi Trigger Forex Trading Strategy provides an opportunity to detect various peculiarities and patterns in price dynamics which are invisible to the naked eye.
Based on this information, traders can assume further price movement and adjust this strategy accordingly.
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How to install Heiken Ashi Trigger Forex Trading Strategy?
- Download Heiken Ashi Trigger Forex Trading Strategy.zip
- *Copy mq4 and ex4 files to your Metatrader Directory / experts / indicators /
- Copy tpl file (Template) to your Metatrader Directory / templates /
- Start or restart your Metatrader Client
- Select Chart and Timeframe where you want to test your forex strategy
- Right click on your trading chart and hover on “Template”
- Move right to select Heiken Ashi Trigger Forex Trading Strategy
- You will see Heiken Ashi Trigger Forex Trading Strategy is available on your Chart
*Note: Not all forex strategies come with mq4/ex4 files. Some templates are already integrated with the MT4 Indicators from the MetaTrader Platform.
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