November 1, 2016

Heikin Ashi Mountain

I have been looking at Heikin Ashi Mountain from Mark Rose’s Thames Publishing; this is the product where beta testers were being sought a couple of months ago.

The system looks simple enough to operate with clear instructions on how to setup your charts and where the entry signals are. The exit strategy is also easy to follow and well explained.

We normally like to use £10 per pip for comparison with other ForEx systems, but as the system is based on daily charts it is not feasible for most folks to use this stake. The maximum stop is 200 pips, so you need roughly £100k at 2% risk to fund trades at this sort of level, so I will monitor a more reasonable £5k starting bank.

Most trades were open for several days and spanned weekends.

This has been a frustrating trial with many trades in profit, some quite significantly, before reversing and closing for a much-reduced profit or for a loss. Very few trades caught a long-term trend that saw the Take Profit position hit. Post-Brexit the ForEx markets have been, erm, “interesting” for sure. Mark has said on one of his recent posts that he is looking at how to lock in more of these profits; if the system is changed then that’d be a new system that requires a new trial and the results of this trial would be negated.

However, as the system stands as of today the results are not good:

Trades made: 137 of which 3 are still open. Of the closed trades 42 where closed for a profit.

Loss is 1942.17 pips, £1239.15 from a £5k starting bank.

Average Stop is 133.74 pips.

The system, in its current format, is failed.

I hope Mark does find a way to lock in the profits more effectively, and we can then undertake a new trial.

You can try Heikin Ashi Mountain HERE

 

UPDATE 27th November 2016

Isn’t it always the way? You finish a review and the product takes off!

Before I start, I am using data supplied by Mark; however, I have no reason to suspect that the data is not accurate. Further, the data is a few days old as I have been very busy and unable to get around to writing up this update.

November, up to the 23rd and ignoring the three trades that were open, is up around £1,300 using the bank as it stood at the end of the trial (31st October). This takes the bank to around £4,900, only slightly down. It should also be noted that the original system has produced with over an 80% return since the 27th of Jan 16; producing over £4,000 profit from the £5k starting bank.

There have been some changes to lock in more profits. I did say on the final review that it was frustrating to see good positions get stopped out for a loss or small profits.

There are two variations:

·         The 1:2 Reward/Risk (risk 2% to make 1%) has produced the smallest return but is still up 57% since the 27th of Jan 16 and has the advantage of a higher winning trade ratio and a smoother profit curve. It has produced £2,900 profit and during the period of the trail would have made just over £100.

·         A mix of 1:2 Reward/Risk (risk 2% to make 1%) and the original 2:1 Reward/Risk (risk 2% to make 4%) with a 70% return since the 27th of Jan 16. It has produced £3,500 profit from my £5k bank and during the period of the trail would have been down about £160.

The mix of the 2 approaches is the preferred option now for folks new to the method.

The situation is much improved. Not only have the new approaches vastly reduced the loss, but November’s profit has brought my trial bank back to more or less break even. Therefore, I am happy to recategorize this to NEUTRAL based on the trial figures but a return of over 70% (for the mixture of the 2 methods) in 11 months is impressive and tempts me almost to a higher rating.Neutral

You can try Heikin Ashi Mountain HERE

 

Filed under Forex,Spread Betting by Arthur

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