US Market Balance of Power Heikin Ashi Swing Strategy

3 дек. 2022 г.

This is a swing strategy, using the power of correlation, mainly designed for an investment approach for the US Market.

It uses the original OBV formula, which has been adapted to monthly heikin ashi candles values, which are taken from the correlated asset, in this case we are using QQQ chart for testing, but internally we are using the logic from SPY chart for calculations.

Once we that value, we make a moving average of it with the length of half of a year to have an idea about the overall price trend during that period of time.

After that, we are going to apply a percentile formula for the OBV value, and we are going to look for the percentile near 100th rank of the entire history of that data.

Finally once we have the top percentile values, we are going to create different formulas for long and short entries:

Short Entry/ Long exit = Current top percentile is higher than the previous top percentile value
Long Entry/ Short Exit = Current obv value is negative and the top percentile is smaller than the previous one or we are near the top values for the OBV oscillators ( crossing upwards previous candle/downwards current candle)


The strategy has been tested using 25% of the entire initial capital available in order to have an idea about the compound effect over the entire history of time which was selected.

From the test which can determine, that on average when we have strong bullish trends, the initial buy n hold strategy outperforms us, however the strategy is definitely a winner when there are side market/ bearish periods of time since it will help cut losses during these periods.


If you have any questions, please let me know !