A Contrarian Heiken Ashi Reversal Strategy with ATR-Based Sizing

Summary

The Heiken Ashi Naive expert advisor uses the last two completed Heiken Ashi candles to generate entries and exits. It takes contrarian entries: after two candles in the same direction, a longer latest candle without a wick at the relevant end triggers a trade against that candle direction. An opposite-direction open position is closed when a new signal arrives, while a same-direction position is left unchanged. Separate two-candle wick conditions can close existing trades before another entry signal.

The document presents the approach as an attempt to catch reversals early, but supplies no backtest or performance evidence. It describes optional position sizing based on ATR and configurable risk as a share of balance or equity, or as a fixed currency amount. Although it claims there are no strategy inputs requiring optimization, it still lists sizing and execution settings. The candle formulas in the source appear inconsistent with conventional Heiken Ashi definitions, so they should be checked before implementation.

Key ideas

• The strategy forms signals from the two latest completed Heiken Ashi candles.
• Its entries go against the direction indicated by a pair of strengthening candles with a specified wick condition.
• An opposite open position is closed on a new signal, while a same-direction position is retained.
• ATR-based sizing can use percentage risk or a fixed account-currency risk amount.
• The document offers no performance results, and its stated candle formulas require verification.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.