Trend Trading Strategy Heiken Ashi Smoothed and Bbsqueeze Trading

Greetings, dear readers of ForTrader.org Trader magazine. Today I would like to review with you one a trending strategy called Heiken Ashi Smoothed and Bbsqueeze Trading. If my memory serves me correctly, the strategy Heiken Ashi Smoothed and Bbsqueeze Trading comes from 2011, although it was seen again in the foreign segment in 2014. It was actively discussed on various forums, but it never showed up in the hands of domestic traders. Although the strategy is old, still we will try to take it apart and find ways to improve it.

Input parameters

• Currency pairs: any
• Timeframe: from M30 and up
• Trading hours: 24 hours a day
• Type of strategy: trending, indicator

Installing the Heiken Ashi Smoothed and Bbsqueeze Trading Strategy

The Heiken Ashi Smoothed and Bbsqueeze Trading strategy is installed in a standard way. If you did everything correctly, the desktop of your terminal should look something like this:

Used indicators

The trading system consists of five indicators. Now let's go over each one briefly:

• Moving Average - standard trend indicator of the MetaTrader 4 platform. The strategy uses two moving averages with a period of 21 (black) and with a period of 7 (white). In the strategy, they perform the function of trend detection. If a 7-period moving average is above a 21-period one, we are in a bull trend, and if vice versa we are in a bearish trend. It's also important to make sure the moving curves cross each other, as it signals the change of trend on the market.
• 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 indicator, since it draws us blue and red arrows up and down. You can change the moving average parameter, making the signals earlier or delayed, thus optimizing the strategy for your trading style.
• SDX-TzPivots - this indicator draws us pivot levels as dotted lines. In the strategy it can be used as an assistant to determine the goals, as well as the profit.
• Cynthia BBsqueeze - the indicator is located in the first additional window in the form of a histogram of different colors. In the settings you can only specify the number of barsThe indicator calculates its readings on the basis of which it calculates its readings. It acts as a filter in the trading strategy.
• RSX - this indicator is also in the first additional window and is displayed as a line of pink and green. In fact, the indicator is a graphical modification of standard RSI oscillator with parameter 14. The parameters can be optimized to your liking, as with the standard RSI.

Having analyzed all the indicators in detail, I came to the conclusion that the strategy essentially consists of standard and long-known indicators. All the settings are open, which gives us the opportunity to reconfigure the strategy under the current trading conditions.

Heiken Ashi Smoothed and Bbsqueeze Trading Strategy Signals to Buy

We enter the purchase if a number of these conditions are met:

• The indicator 1_Skdon_trend_sig draws a blue arrow upwards. The bars are blue.
• The 7-period moving average (white) is above the 21-period moving average, or the 21-period moving average is crossed by the 7-period moving average 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 Strategy Signals to Sell

We enter the sale if a number of these conditions are met:

• The indicator 1_Skdon_trend_sig draws a red down arrow. The bars are red.
• The 7-period moving average (white) is below the 21-period moving average, or the 21-period moving average crosses the 7-period moving average downwards.
• The histogram of the Cynthia BBsqueeze indicator is purple.
• The RSX indicator line is pink.

Exit a position, stop-loss

The author of the strategy proposes to exit when the arrow indicator 1_Skdon_trend_sig appears in the opposite direction. You can also put your Take Profit by pivot levels, thus moving stop-loss and take-profit from level to level, squeezing the maximum profit out of the market.

Stop Loss in the strategy can be put in two ways. The first, which is also classic, is to place a stop loss at local lows and highs. Just like with take profit, you can put your stop loss at the pivot level. The author of the strategy insists on a stop-loss to take-profit ratio of one to two.

Money Management

You may think it's silly, but as my practice shows, an experienced trader is not the one who has been trading for a long time, but the one who uses money management. Since there will not be many signals to enter the position, I recommend not to risk more than three percent of the deposit per position.

Personal opinion of the author of the article

Trend Trading Strategy Heiken Ashi Smoothed and Bbsqueeze Trading does not have complicated rules of entry and a bunch of unnecessary indicators, all indicators are competently selected. It's also a pleasure to have a clear definition of trend with the help of moving averages. The settings of all indicators are open, which allows a more or less proficient trader to optimize the strategy for his trading style. I recommend the strategy to both beginners and professionals. Have a good trend and don't forget to share your impressions in the comments.

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