HACOLT

Description

HACOLT (Heikin Ashi Candles Oscillator Long Term) is a technical indicator designed by Sylvain Vervoort. It is based on Sylvain Vervoort's previous indicator, HACO (Heikin-Ashi Candles Oscillator), which was described in his article "Trading with the Heikin-Ashi Candlestick Oscillator" for the December 2008 issue of Technical Analysis of Stocks & Commodities magazine.

Optimized for long-term trading, HACOLT shows three levels: 0, 50, and 100. These levels suggest "an open short position", "no open position", and "an open long position", respectively. Passing from a certain level to another is viewed as a trading signal:

  • Rising from 0 or 50 to 100 suggests a Long Entry and Short exit;
  • Falling from 100 to 50 or zero suggests a Long Exit;
  • Falling from 100 or 50 to zero indicates a Short Entry.

Main principles of HACOLT include:

  • HACOLT uses zero-lagging TEMA based on modified Heikin Ashi Close prices for data smoothing;
  • Close price higher than its EMA is a Sell signal (represented as falling to zero level);
  • Short candles suggest keeping a position. To keep a long position, candle's High should also be greater than or equal to previous Low; to keep a short position, candle's Low should be less than or equal to previous High. A candle is considered short if its real body is smaller than its High-Low range multiplied by candle size factor.

Input Parameters

Parameter Description
tema length The number of bars used to calculate TEMA.
ema length The number of bars used to calculate EMA.
candle size factor The factor used in short candle determination. Default value of 1.1 has no influence, whereas values lower than that will provide faster exits.

Plots

Plot Description
HACOLT The Heikin Ashi Candles Oscillator Long Term plot.

Further Reading

1. "Long-Term Trading Using Exchange Traded Funds" by Sylvain Vervoort. Technical Analysis of Stocks & Commodities, July 2012.

2. "Trading with the Heikin-Ashi Candlestick Oscillator" by Sylvain Vervoort. Technical Analysis of Stocks & Commodities, December 2008.

3. "The Quest For Reliable Crossovers" by Sylvain Vervoort. Technical Analysis of Stocks & Commodities, May 2008.

Example*

*For illustrative purposes only. Not a recommendation of a specific security or investment strategy.

You may also like
CamarillaPoints
The Camarilla Points study is a support-resistance technical indicator designed by Slawomir ...
Social Sentiment
Social Sentiment is a thinkorswim feature designed to help you with your trading decisions based ...
FX Reports
The FX Reports interface provides you with an ability to view various generated reports ...