Quill: Take a Look

LOL Ok, I was wondering what smiley faces meant. I might have to start a Quill dictionary.

Andy

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Heiken-Ashi Candlesticks are an offshoot from Japanese candlesticks.

Heiken-Ashi Candlesticks are based on price data from the current open-high-low-close, the current Heiken-Ashi values, and the prior Heiken-Ashi values.

Buying and Selling with the GREEN and RED bars.

The intention was written to trade only with Heiken-Ashi charts because it smooths out the regular candle Stix mess in transit. As you will soon see, it is easy on the eyes.

Now we have to listen to what Simon Sez to do with just two (2) simple rules.


a. BUY on the First GREEN Bar after the Last RED bar. No waiting.
b. BUY on the First RED Bar after the Last GREEN bar. No waiting.


Now this is funny, I have an index card that is written in RED and GREEN ink and blue ink for the remaining werds not to forget what Simon Sez to do.

  1. Using COST chart as an example. A stock to own for a lifetime. Hot dogs are still a Buck fitty.

  2. We are in the RED area and waiting for the last RED bar.

  3. The last GREEN bar was on 11/30/22 then the following morning a RED bar appeared. Simon Sez man No waiting around and SELL it providing it does not head north as a possible head fake.

  4. And we wait and wait and wait then on the last RED bar that appeared on 1/5/23, Simon Sez, to BUY the first GREEN bar after the last RED per Rule a.

  5. And again, we wait and wait or Go Fishin or hit some little white pellets all over the big GREEN carpet. FORE !!

  6. Stir - Rinse - and repeat when the last GREEN / RED Bars appear.

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Greetings, just wanted to chime in. Smoothed HA is simply the HA candles calculated based on the MA’s (any form you want, Hull, EMA, Triangular, SMA, etc) of the open, close, high and low of the calculated HA levels. I believe they are essentially the core of several purchased systems like Trend Trader Pro (I believe, do not know). They are graphically wonderful and I do appreciate and use them. But I want to stress one warning for those using them, they eliminate gaps so use dual charts often or sometimes I use a median maHA line on a price bar chart. Back testing users often make the mistake of calculating the buy and sell price based on the maHA values when they need to use the actual price at the intervals prompted by the maHA.

I never figured out how to generate them in Stockcharts, but have written thinkscript code for TDA, as well as stumbled on another version on a TS forum. I can probably share that if any of you use TOS, although I am headed out the door early am to go drop some trees and get real dirty landscaping.

Lakedog

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“…they eliminate gaps, so use dual charts… Back testing users often make the mistake of calculating the buy and sell price based on the maHA values when they need to use the actual price…”

Lakedog,

Greeting to you well, and thank you for repeating my warning to Quill that, because HA bars smooth actual prices, using them can make a chaotic time-price series seem more orderly and predictable than it really is. Charts based on the ‘HA Smoothed’ indicator --instead of just HA bars-- add yet another level of abstraction. Thus, I said that, while using the HA Smoothie format will lessen the analysis problem, --due to providing a lot of clarity about what the almost noiseless trend seems to be-- depending on the HA Smoothe alone (probably) will increase execution risks.

The solution, as you say, is using two charts, or just sticking with actual prices from the getgo. But that raises a different sort of problem, namely, though everyone thinks they know how to use candlesticks properly, they really don’t. Candlesticks is a just charting format that has to be distinguished from Candle Pattern Analysis, whose exposition is a post for another time.

Arindam

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Apologies if I was just repeating what has been said. I skimmed this thread.

But let me expand one thing. You said “The solution, as you say, is using two charts,” but here’s a twist and a plug for thinkorswim from TD Ameritrade; I have written maHA code also as an indicator, so it shows up below the price chart like any other indicator. That is great just as a trend confirmation with quick glance, which is really what it is best for. But, I am also playing around with using an average of maHA as a line on the price chart and vice-versa, using crossings as signals. Backtesting is the weaker aspect of TOS. You can do charts as strategies, but I’m not sure I totally trust the results. I have written excel spreadsheets for maHA and intermittently have been trying to do backtesting but haven’t worked it all out yet. That’s more tedious than I really enjoy. Too many other fun things to do, but will chip away at it. You need to figure out a way to use your backtesting systems. This thread may have prompted me to take a good look at this all again. And yes, you are 100% correct, candlestick patterns mean so very much more.

Best wishes. Off to the lake.

Lakedog

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Lakedog,

No apologies are necessary from you. It’s me should be apologizing for not showcasing what you said.

Yeah, TOS is powerful, and there are beaucoup tutorials how on to write scripts for it. However, I’m not yet ready to do that kinda work. Also, I think it might not be necessary if one’s intentions are just to trade mutual funds rather than stocks/ETFs.

If you’re looking for a low-cost back-tester, try StockAnalyzer. In the mid price range is AmiBroker. The expensive one is MetaStock. But totally free --and fun to use-- is the one found at Portfolio Visualize.

So, you’re playing Paul Bunyan for the day? Have fun, but be careful.

Arindam

That was a false assumption, sorry about that, the charts are behind the volume indicator and will not show up till the next day.

Andy

Quill,
When you look at smiley faces how do you interpret that? Is it a good thing? Does it indicate a change of trend?

Andy