Filtering Heikin-Ashi Entries with Moving-Average Trend Direction

Summary

This DAX hourly strategy uses Heikin-Ashi direction as an entry trigger and three exponential moving averages as a trend filter. It opens a long position during a specified daytime window when the faster averages are ordered above the slowest average and the Heikin-Ashi indicator signals upward direction. Short entries use the inverse average ordering and downward signal. Each position has a fixed profit target and stop loss, and the code prevents cumulative orders.

The author says the settings were developed using an in-sample period of about 28 months and then assessed over a further seven months out of sample, with a spread assumption of two. They report finding the approach suitable only on DAX hourly data and raise concerns about curve fitting and robustness. No return, drawdown, trade-count, or comparison results are included, so the test design and reported market specificity are not enough to establish an edge. Costs, parameter sensitivity, and broader market or period testing remain unresolved.

Key ideas

• Heikin-Ashi direction supplies the entry signal while three exponential averages define trend direction.
• Long and short trades require aligned average ordering and are restricted to a daytime trading window.
• The implementation uses fixed stop-loss and profit-target levels.
• The author describes an in-sample and out-of-sample test on hourly DAX data but provides no performance metrics.
• The author explicitly questions robustness and reports poor results on other markets.

Tags

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