Joey Plazo and his Renowned Heikin Ashi Trading Strategy.

Gist:Joseph Plazo and his Recommended Heikin Ashi Trading Strategy.

Joseph Plazo is a well known money dealer who backs the usage of heiken ashi lines.

As a background, candlestick patterns give reversal signs which are effective when you combine them with other evaluation. But, the standard candlestick pattern is poor to the heiken ashi form..

So the question is simple. Is there a more effective method to trade candlestick patterns?

Yes. Heiken Ashi candlestick chart.

A Heiken-Ashi candlestick graph is a distinctive tool that offers an alternative view of cost activity.


Heiken-Ashi (HA) charts are candlestick charts derived from normal candlestick charts. These really are the formula for Heikenashi taverns.

HA Open = Midpoint of previous HA pub

HA High = Highest of High, HA Close, HA Open

HA Low = Lowest of Low, HA Close, HA Open

As you see from the formula above, we build Heiken-Ashi candlesticks with current and past cost data. It evens out little cost fluctuations to highlight cost tendencies.

The strategy I analyzed was based on the EUR/USD pair on the 4-hour timeframe. The historical data was from 2009 - 2014. The protocols were advocated by Joseph Plazo on


Trade Long when Heikin Ashi turns favorable and MACD is below 0

Commerce Short when Heikin Ashi turns negative and MACD is above 0

Close Long when Heikin Ashi turns negative

Close Short when Heikin-Ashi turns favorable

I used a stop loss and profit target of the ATR * 10.

Additionally, I just chose trades that occurred during the European trading session. This includes the US morning session.

Eventually, I liked to take account of the summer slowdown in the financial markets a so excluded the months of August and July from my analysis.

In the very first year of testing I brought in a net of $54,000 from a base investment of $15,000. Upon the recommendation of Joseph Plazo, I came up with additional rules:

Altered Trading Rules for Heiken Ashi Strategy.


Purchase Rules:

Standards #1: Heiken Ashi candlestick has to close above the 144 interval SMA

Criteria #2: Heiken Ashi candlestick must be green

This really is your buy entry.

Stop-loss process:

1) Location stop below the prior swing low.

2) Close the commerce when opposite sign (sell) is triggered.

Price Objectives (partial profit taking):

Reserve 50% profits at 1:1 threat-to-reward. Reserve 50% profits at 1:3 (use trailing stop).

Sell Rules:

This really is your entry that is sell.

Stoploss process:

1) Place stop above the previous swing high.

2) Close the commerce when reverse sign (sell) is activated.

Targets: See buy trading rules.

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