BUY
1. The GMMA Slow lines should be well spaced and not stuck with one another. When they are stuck, it means that the market is ranging and when they are spaced, with at least 1 pip between each other, then it means that we have a trend. Since we are dealing with a trending system, it is primordial that this rule should be observed very closely. I will try to elaborate on this at the end.
2. Heiken Ashi Candle should retrace back to the Blue EMAs after a prior UP MOVE.
3. Stochastics should be below 30 and trying to go up.
4. RSI should be below 20
5. Finally, the Heiken Ashi should produce a new CLOSED white candle after the red ones. This is our entry.
Here are the 5 basic rules that can guarantee you profitable trades if you follow each and every of them without ever burning a single one. Now take a look at the screenshot below for the BUY trading examples.
As you can see above, we have 2 clear cut buy trading signal from the system. You could have taken only the first one and ride it or you can divide you lots and re-enter again on the 2nd,3rd,4th etc signals. Both of these signal has fulfilled all the 5 rules as outlined above. You can see that there could have been other signal as well, but not all the rules had been met, so we totally discard them. Success in these trades can only be achieved if these rules are observed closely. That is all regarding the Buy Trading Signal, let us move to the Sell signal now.When to SELL
So, let us look into the Sell details. Determining whether we have a Sell signal or not is fairly easy by now since it is the exact opposite of the Buy signal. The rules are as follows and the screenshot is at the bottom with the illustration on the Sell rules as well as the Sell signals. So, the Sell rules are:
1. Moving Averages should be well spaced and not compressed together. Will talk a little more on this at the end of this post.
2. Heiken Ashi (price) should retrace back(up) to the BLUE moving averages after a prior DOWN move.
3. Stochastics should be above 70 and start to fall
4. RSI should be above 80
5. Heiken Ashi Candle should turn RED from white and CLOSE on a RED candle.
These are the Sell rules that you will need to observe in order to determine a Sell signal from this trading method. As a reminder, burning even one of these rules can render the trades into losers. Now, let us look into the screenshot below for a detailed view on the Sell signal and trade examples.
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