This is an answer back to repeated requests for a simple version of Bjorgum Triple EMA Strat, which is not recommended for use with Heiken Ashi candles as it results in "double smoothing" of the averages and can give late signals as a result.
The inputs are raw and super basic. At its core its really just 3 EMAs that you can customize the source and length. The averages and shadowing change color based on if they are either rising or falling.
default values are 5, 9, and 21 EMA on open as source.
Bar color is dictated by the bar close over or under the 5 and 9 EMA.
This is suitable for use on HA candle.
Release Notes
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This update is to change the display picture which housed a depiction of buy and sell recommendations using Heiken Ashi, which is against TradingView house rules. It is important traders understand the nature of synthetic HA values on the chart and be aware of the caveats when applying to real market. Back testing on HA can give unrealistic results and should be understood when using this script to chart with HA candles.
Also newly updated are alert functions to alert up or down crosses. Alerts are dynamic to give reference in the alert message to the timeframe the alert occurred and the closing price at the alert time
I've found for backtesting this indicator (using heiken ashi), putting a line or arrow pointing at every candle color change to designate a long or short position works well. So if the candles change from blue to red, I put an arrow pointing down at the first red candle to denote a sell or short. For a change from red to blue, I put an arrow pointing up at the first blue candle. for a grey candle, you can put an X or ? over it to indicate a potential reversal. Once I have the arrows in place for any given time period I'm testing, I switch the chart view to traditional candles and remove the indicator strategy from my chart and begin my testing, always using the candle CLOSE value for position entries and exits. That takes away the variation in price of the heiken ashi candles for the purpose of backtesting. Hope this helps some of you guys.
BradWeber82
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I really like this. I use a 8/21 EMA cross strategy for scalping options and want to give this a try. What time frame do you recommend for this? thanks!
GarethSA
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Also if i may ask why is SRCFAST set to OPEN and NOT CLOSE?
GarethSA
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Hi
You say in the first line that this is NOT to be used with HA candles but then in your last line you say ..... "This is suitable for use on HA candle"
So which candles must we use?
Bjorgum
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@GarethSA, It says this script is an alternate which IS suitable for HA, whereas my other EMA script is smoothed with HA inputs. Use it on which ever you like as its just an EMA. Source open is personal preference, but since its an input that can be changed in the settings menu, you can set it to your personal preference.