Trading Made Simple (TDI + Heikin Ashi) Backtested: the Full Rules on EUR/USD

00The verdict in three lines

• We tested the full Trading Made Simple rules on EUR/USD: enter at the TDI green/red cross only on the first or second Heikin Ashi candle of the move, re-enter on a bounce of green off red, confirm direction with the stochastic, exit when green hooks, flattens or crosses back. Three versions: the author's 4-hour night routine, the same rules at any hour, and 1-hour charts in the US session.
• The author's routine lost after costs: -0.39 pips a trade over 1,339 trades. The rules at any hour made +0.55 pips a trade, the best result of the TDI family on this site, but only because of 2004 to 2012; from 2020 they lost.
• Buried, all three. This test was chosen after our plain TDI test on the same data, which we state and which raises the bar.

01What is the Trading Made Simple strategy?

“Trading Made Simple” (thread 291622 on Forex Factory) is the method of the trader known there as Big E. Its chart is short: Heikin Ashi candles, a 5-period EMA, the Traders Dynamic Index (TDI) and a Stochastics (8,3,3). The author says the TDI drives entries and exits and the stochastic only confirms direction. The rules on the thread's first pages, in our words:

• Entry: when the green TDI line crosses the red one, enter at the start of the next candle, but only if it is the first or second candle of the move; from the third candle on, skip it.
• Re-entry: if green bounces off red and carries on, it is fine to re-enter.
• Exit: when green goes flat, starts to hook over, or makes a check-mark reversal.
• The routine: 4-hour charts at night, checked when the candles open at 10pm and 2am Pacific, with all 4-hour trades closed at 6am Pacific; and 1-hour charts during the first three hours of the US session.

The TDI itself (green, red and yellow lines from RSI 13) is explained in our TDI article, which tested the bare cross and two variations and buried all three for costs.

02Our fixed reading of the TDI Heikin Ashi strategy rules

• Candle 1 or 2: the cross is taken if the signal candle is at most the first Heikin Ashi candle of the trade's colour, so the entry candle is the first or second.
• Bounce: green above red on the last two candles, down to within 2 RSI points of red on the previous candle, and turning back up (the mirror for shorts).
• Stochastic confirmation: %K above %D for a long (below for a short), and %K between 20 and 80, which the same author advises elsewhere.
• Exit: the first candle where green moves against the trade (a hook), moves less than 0.5 points (flat), or crosses red the other way.
• No stop and no target, as in the thread; fills at the next candle's open, 1 pip a round trip.

These readings are ours, fixed on 22 October 2026 before running anything. Other readers of the thread could draw “flat” or “bounce” differently, and the parts the author leaves to experience (support and resistance, consolidation, news) are not in the test.

03How we tested it

EUR/USD from the IC Markets MetaTrader 4 history, 1-minute bars from January 2004 to 28 September 2026, built into 4-hour candles on the broker's clock (opening at 5pm, 9pm, 1am, 5am, 9am and 1pm New York, so 10pm, 2am and 6am Pacific are candle opens) and into 1-hour candles. Costs: 1.0 pip a round trip, also shown at 1.5 and 2.5 times. Periods: 2004 to 2012, 2013 to 2019, and a holdout from 2020 already used. First-period bar t ≥ 2.5, because this test was chosen after a result on the same pair and indicator. Control: every trade moved to another day at the same time of day, keeping its direction and length, 500 times, so the night and US windows stay in the control. Engine check: the Heikin Ashi run, the stochastic, the candle rule, the bounce, the exits, both time windows, and an independent re-implementation that matched every one of the 6,998 trades (tms_selftest_result.txt).

04Results: does Trading Made Simple work?

Cumulative net pips by month. * Holdout already used before this test.

How trades started and ended

The night routine rarely let a trade run: 65.3% were closed by the 6am rule, after one or two 4-hour candles. The same rules at any hour, without the 6am close, made money on average before 2020.

05Trading Made Simple vs the plain TDI cross

The extra rules, the candle count, the stochastic and the bounce, lifted the early years and did not help the recent ones: in the holdout period each of these versions lost more than a pip a trade, the full rules at any hour most of all.

06Signals or random timing?

The control moves every trade to another day at the same time of day. The any-hour version came close to the 95th percentile; the 1-hour US version sat at the median, its signals no better than chance.

07By period and by year

08The gates

The data-gap check removed 2, 55 and 4 trades open across a suspect gap; no verdict changed. Costs: positive before costs, negative after. Fragile: positive overall, negative without the ten best trades.

TWhat this shows, and what to take into your own tests

What the results show

• The author's own routine, 4-hour EUR/USD trades taken on the 10pm and 2am Pacific candles and closed at 6am, made +0.61 pips a trade before costs and -0.39 after, over 1,339 trades from 2004 to 2026; 65.3% of them were closed by the 6am rule.
• The full rules at any hour did better than the bare TDI cross with a hook exit (+0.55 against -0.62 pips a trade), so the stochastic filter, the candle rule and the bounce re-entry helped; but the gain came from 2004 to 2012 and the holdout lost 2.87 pips a trade.
• On 1-hour candles in the US session the signals were worth nothing before costs: +0.01 pips a trade, exactly in the middle of the random-timing control.

What remains unknown

• The author's judgement. Our fixed readings of "flat", "hook", "bounce" and "candle 1 or 2" are not the only possible ones, and the parts he calls experience are not in the test.
• Other pairs. He watched eight; we tested EUR/USD, the one we have 22 years of.
• Stops. As in the thread, none were used; the worst open loss inside one trade was 277 pips on 4-hour bars.

Why it was buried

The night routine paid costs on short trades that rarely had time to develop: most were closed at 6am Pacific after one or two candles, and 46.2% won. The any-hour version was the strongest of the TDI family on this site, with a first-period t-statistic of 2.06 (2.5 needed) and the 94.2th percentile of the control (95 needed), but its validation profit factor was 1.04, it lost 1,671 pips in 2022 alone, and it turns negative without its ten best trades. It was also chosen after the TDI result on the same data, which weakens even a near miss.

What you can apply to your own tests

• Test the routine the author actually follows, including his hours and his forced exits, not only his entry signal.
• Filters that help in one period are not an edge until they help in the next. Here they lifted 2004 to 2012 and did nothing for 2020 to 2026.
• When you go back to a method after seeing a bad result, write down that you did; a second try on the same data needs a higher bar.

A note on the numbers: drawdown figures are measured on closed trades unless a table says it includes open losses. Open losses inside a trade are not counted in a closed-trade drawdown, so real account risk is higher, especially for systems with no stop. Backtests are not live trading.

FAQCommon questions

What is the Trading Made Simple strategy?

A method from a Forex Factory thread by the trader known as Big E: Heikin Ashi candles, a 5-period EMA, the TDI and a Stochastics (8,3,3). Enter when the green TDI line crosses red on the first or second candle of a move, re-enter when green bounces off red, and exit when green goes flat or hooks over.

Does the TDI Heikin Ashi strategy work?

Not well enough in our test: the best version made +0.55 pips a trade over 3,486 trades on EUR/USD 4-hour charts but failed five of our six gates and lost money from 2020 on.

Does the night routine work?

Taking 4-hour trades on the 10pm and 2am Pacific candles and closing them at 6am Pacific made -0.39 pips a trade after a 1-pip round trip; most trades were closed by the 6am rule before they could develop.

Do the stochastic and the candle rule help the TDI?

A little: with them the 4-hour TDI cross made +0.55 pips a trade, against a loss for the bare cross with the same hook exit, but the improvement was in 2004 to 2012 and did not survive the later years.

How was the strategy tested?

On EUR/USD 1-minute data from 2004 to 2026, built into 4-hour candles on the broker's clock and 1-hour candles, no stop as in the thread, 1 pip a round trip and rules written and dated before the data was run, costs included on every trade, results split into development, validation and holdout periods, a random-entry control as the benchmark, and every variant reported; the test was chosen after our plain TDI test, so the bar was raised. Read the protocol.

09Check our arithmetic

Code provenance: our own code, written from the specification; the thread is cited for its rules only, and we have no connection with its author or with CompassFX.

10Data notes

Source. IC Markets MetaTrader 4 EUR/USD 1-minute bid history (a demo server); 4-hour candles cut on the server's clock (New York + 7 hours), as its charts are. Pacific and New York time change on the same dates, so the author's 10pm, 2am and 6am Pacific are always 1am, 5am and 9am New York. Fills: the first minute of the candle after the signal; no slippage beyond the 1-pip cost.

11Corrections

22 Oct 2026, navigation: added a link to the new guide comparing trading costs across all our tests. No result changed. 22 Oct 2026, navigation: added a link to the new guide comparing trend following and mean reversion across all our tests. No result changed.

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