Heiken ashi trend following forex strategy

Heiken ashi trend following forex strategyHeiken Ashi Trend Following Forex Strategy

A trend following system based on the Heiken Ashi trading indicator. Use on 30 minute chart and higher time frames for best results.

Trading sessions: Any

Preferred Currency pairs: Majors

An example of the Heiken Ashi strategy in action on the GBP/USD pair (H1)

Click to enlarge the chart.

Trading Rules

Heiken Ashi white candlestick (bullish)

MADC_OsMA above the 0.00 level (short term bullish trend)

Trend bars indicator: blue bar (trend up)

Simple versatile forex strategy with heiken ashi candlestick

Simple versatile forex strategy with heiken ashi candlestickSimple Versatile Forex Strategy With Heiken Ashi Candlestick

Take advantage of the smoothed Heiken Ashi candlestick with this simple versatile trading strategy. It can be used for all trading styles including scalping and day trading.

Indicators: Heiken_Ashi_Smoothed, 144 Period Simple Moving Average

Preferred time frame(s): Any

Trading sessions: Any ( Euro and US Session for scalping)

Preferred Currency pairs: Any

EUR/USD 5 Min Chart

The 5 minute chart shows you a buy and sell trade. Red Heiken Ashi candlestick below the 144 SMA gives sell signal. On the contrary, green Heiken Ashi candlestick above the 144 SMA gives buy signal. Click the chart to enlarge.

Trading Rules

Criteria #1: Heiken Ashi candlestick has to close above the 144 period SMA

Criteria #2: Heiken Ashi candlestick must be green

This is your buy entry.

Stop-loss method:

1) Place stop below the previous swing low.

2) Close the trade when opposite signal (sell) is triggered.

Price Objectives (partial profit taking):

Book 50% profits at 1:1 risk-to-reward. Book 50% profits at 1:3 (use trailing stop).

Criteria #1: Heiken Ashi candlestick has to close below the 144 period SMA

Criteria #2: Heiken Ashi candlestick must be red

This is your sell entry.

Forex my passion-ashi strategy(intraday&scalping)

Forex my passion-ashi strategy(intraday&scalping)Forex My Passion - Ashi Strategy (Intraday & Scalping)

Time Frame: H1 Daily

Indicators:

Envelopes (14)

Heiken Ashi Smoothed_v2 (2, 6, 3, 2)

Awesome Oscillator AO (default settings with level 0.0)

Accelerated Directional Movement Index (ADX) (settings period 14, Typical Price HCL/3) Level 22 44

MACD (12, 26, 9) (level 0.0)

Explanation

I use candle stick line charts.

1. The line chart if the price is in between envelope no trade. Price must crosses above / below envelop. In candle chart wait for the candle to close above / below envelop.

2. Heiken Ashi gives the clear direction of trade (red for down trend and blue for uptrend)

3. Trade only if ADX is above 22

4. AO MACD must appear above for uptrend below for downtrend.

5. Buy when the candle closes above envelop/ Sell when candle closes below envelop.

6. SL mist be 5 pips above / below the swing high or swing low

Scalping System:

1. The line chart if the price is in between envelope no trade. Price must crosses above / below envelop. In candle chart wait for the candle to close above / below envelop.

2. Heiken Ashi gives the clear direction of trade (red for down trend and blue for uptrend)

7. To scalp (all above points should meet) as long as Heiken Ashi is blue and the price is above envelop place buy trades for 5 to 20 pips and if Heiken Ashi is red place sell trades. if price starts moving in opposite direction and is in between envelop stop trading / scalping in that direction and wait for the clear entry again.

Download Forex My Passion - Ashi Strategy

Tips of the Post: Go with the trend! Trend is your friend. Trade with the trend to maximize your chances to succeed. Trading against the trend won't "kill" a trader, but will definitely require more attention, nerves and sharp skills to rich trading goals.

115#heiken ashi technique-forex strategies-forex resources-forex trading-free forex trading s

115#heiken ashi technique-forex strategies-forex resources-forex trading-free forex trading s115# Heiken Ashi Technique

At first glance, Figure 1 shows that the heikin-ashi chart looks more compact and smooth compared to the traditional chart. White candles display a rising trend. while black candles indicate a downtrend.

Gaps. which occur frequently on the traditional OHLC chart, are not present because they are incorporated into the modified candles. Strong positive trends have long white bodies with no lower shadows, while strong negative trends have long black bodies with no upper shadows. When bodies become shorter, a weaker trend is anticipated (see mid-October and end of December).

different colors to differentiate descending and ascending trends. For each chart I'll discuss how this technique can be used to either enter and stay on the right side of the trend, or avoid trading during periods of consolidations. Standard Poor's 500 (SP500-HA):

A simple forex day trading strategy for beginners

A simple forex day trading strategy for beginnersA Simple Forex Day Trading Strategy for Beginners

Day trading is one kind of trading style in which a day trader usually opens and closes all positions in the same day. In this type of trading, traders do not hold any overnight position. It is a short term trading technique but a bit longer term than scalping. Most of the day traders use 15 minute, 30 minute or hourly charts for trading.

Trading Strategy:

There are various simple trading strategies for day trading. These simple trading strategies are based on simple charts and indicators. Simple trading strategies are suitable for short term trading as these are easy and require less time to understand. A day trader might not have much time to think after getting a trading signal. So, he/she should adopt a simple trading strategy for day trading. Before we discuss on the trading strategy, we should discuss a little on the indicators used.

Indicators used:

EMA10, EMA30 and Heiken Ashi Candlesticks.

Heiken Ashi Candlesticks:

Heiken Ashi candlesticks are quite different from normal candlesticks. Heiken Ashi candlesticks are very useful to determine short term trends and to determine buy and sell signals. The color of heiken ashi candlesticks can give us idea about bullishness and bearishness. When the candlestick is blue colored, then it is indicating bullishness. Inversely, when heiken ashi candlestick is red colored, then it is indicating bearishness. Bullish candles have only upper shadow/leg and bearish candles have lower shadow/leg only. Heiken ashi candlesticks are neutral if the real body of the candle is small and it has both upper and lower shadow/leg. Several frequent neutral candlesticks should be taken as a sign of trend reversal. Bullish and bearish heiken ashi candles have shown in the chart below.

Currency Pairs:

All major currency pairs such as EUR/USD, AUD/USD, GBP/USD, USD/CAD and USD/CHF.

Trading Session:

Overlapping of London and New York Session or first 4 hours of New York session.

Time Frame:

30 minutes.

Entry Conditions:

For long positions,

EMA10 should be above EMA30, and there should be a significant gap between these two moving averages.

Heiken ashi candles should come to the pullback zone (between EMA10 and EMA30)

A bullish heiken ashi candlestick (blue colored)

For short positions,

EMA10 should be below EMA30, and there should be a significant gap between these two moving averages.

Heiken ashi candles should come to the pullback zone (between EMA10 and EMA30)

A bearish heiken ashi candlestick (red colored)

Stop Loss:

Place a stop loss at the value of EMA30.

Or, fixed stop loss at 20 pips.

Exit Strategy:

A fixed take profit at 40 pips

Here is an example of this trading strategy in the chart of USD/CAD (given below),

This is trading strategy based on pullback trading technique. This strategy is a trend following trading strategy, which provides entry signals in the direction of the major trend. This strategy is capable to catch large profits if trailing stop or indicator based exit strategy is used to trail the profits. It will carry better result if used in favor of long term trends (such as 4 hour trend).

Catch trends with heiken-ashi candlestick analysis

Catch trends with heiken-ashi candlestick analysisCatch Trends With Heiken-Ashi Candlestick Analysis

Candlestick patterns give reversal signals that are effective when you combine them with other analysis. However, there are dozens of candlestick patterns and more than half of them are exotic patterns that rarely occur.

Is there a more effective way to trade candlestick patterns?

Yes. Heiken-Ashi candlestick chart.

A Heiken-Ashi candlestick chart is a unique tool that offers a different perspective of price action. (Learn: Chart Types without a Time Base )

Heiken-Ashi Formula

Heiken-Ashi (HA) charts are candlestick charts derived from standard candlestick charts. These are the formula for Heiken-Ashi bars.

HA Close = Average of Open, High, Low, Close

HA Open = Mid-point of previous HA bar

HA High = Highest of High, HA Close, HA Open

HA Low = Lowest of Low, HA Close, HA Open

As you see from the formula above, we build Heiken-Ashi candlesticks with both current and past price data. Hence, it produces a smoothing effect like that of a moving average. It evens out small price fluctuations to highlight price trends.

While the smoothing effect of a moving average depends on its look-back period, the Heiken-Ashi chart does not need the trader to enter a look-back period and offers a more consistent result.

Heiken-Ashi Candlestick Chart Examples

The chart below is the standard chart for candlestick analysis.

The chart below shows the same instrument over the same time period with Heiken-Ashi overlay.

If you are looking at a Heiken-Ashi chart for the first time, you might come close to thinking that it is the Holy Grail you are searching for. With such smooth and wavy price action, it is easy to find trends and profit from them.

That is true, only if Heiken-Ashi charts show true prices. But they do not.

Despite being plotted in the form of candlesticks, you must remember that Heiken-Ashi charts do not represent current prices we can buy and sell at.

Essentially, we derive Heiken-Ashi charts from price. They are more like trading indicators than price charts.

Heiken-Ashi Candlestick Analysis

Analyzing Heiken-Ashi bars is straightforward. Lets learn by example using the daily chart of Walmart (WMT).

When prices are trending up, Heiken-Ashi bars have no lower shadow.

When prices are trending down, Heiken-Ashi bars have no upper shadow.

Doji-like bars with both lower and upper shadows are possible turning points.

The doji bars also appear in price congestion.

Find Market Turning Points with Heiken-Ashi Candlestick Analysis

Trading reversals with Heiken-Ashi charts is a two-step process.

First, find dojis on a Heiken-Ashi chart. We have already done this by marking out the dojis on the Walmart chart above. The dojis highlight areas of possible reversal or continuation where we can find trading opportunities.

Next, refer to the standard candlestick chart and look for reversal candlestick patterns.

This is the same WMT daily chart. We have circled the candlestick patterns in the Heiken-Ashi doji zones.

There was a Morning Star candlestick pattern here. It is a bullish three-bar reversal candlestick pattern.

After the bullish swing that filled the earlier price gap, Heiken-Ashi dojis coincided with the Three Black Crows pattern. This bearish candlestick pattern led to the down swing which ended with a double bottom.

Walmart is filled with stars. In the other two trading zones, we found Morning Stars patterns that continued the bullish trend.

This trading approach is not foolproof. Look at the first Morning Star candlestick pattern at the bottom of the chart. The two bars before it formed a Dark Cloud Cover pattern which is bearish. Taking that signal to go short will result in a losing trade.

However, Heiken-Ashi charts are really useful for quickly identifying areas of interest for further candlestick analysis.

Let your Profits run with Heiken-Ashi Analysis

Do you have a problem letting your profits run? Do you watch over each trade with your eagle eye? Do you feel stressed by each tick of price change?

If you answered yes to any of the questions, Heiken-Ashi chart is the solution.

Lets take a look at a simple method of exiting with Heiken-Ashi chart. When a Heiken-Ashi bar that goes against our trade appears, we exit.

This chart marks out the exit points for long trades and short trades using this straightforward method. If you had applied the same exit method using a standard candlestick chart, you would have exited with smaller profits.

Hardly any reason not to let your profits run. Right?

Conclusion: Power of Heiken-Ashi Charts

Heiken-Ashi charts are powerful additions to your candlestick trading arsenal.

They point the way to hot trading zones for further candlestick analysis.

They do not need any user inputs. No more testing for the ideal moving average look-back period.

Weekly heiken ashi high low trading strategy

Weekly heiken ashi high low trading strategyWeekly Heiken Ashi High Low Trading Strategy

The weekly Heiken Ashi high low (pivot) trading strategy is a simple trading method that makes use of only the weekly time frame. Besides the Heiken Ashi candles, the other indicators used are the high/low pivot points. The trading strategy is easy to use but takes a lot of time both for waiting for a signal and for the trades to reach their objectives. The basic principle of this trading strategy is based on the concept of highs and lows that are formed and the subsequent price action thereafter. In a nutshell, when price closes above a new pivot high, we buy or go long and if price closes below the recent new pivot low, we sell or short. This trading method is almost similar to a trend following method.

The Heiken Ashi Candles are found on almost any charting platform and the pivot high/low indicator is also easy to find. In the lack of absence of the pivot high/low indicator, traders can visually plot the highs/lows for the specified period of time.

Chart Set up Heiken Ashi High/Low

Time Frame: Weekly (for the simple reason that a weekly time frame tends to yield higher profits and price action is not that susceptible to choppy movements)

Heiken Ashi Candlesticks

Pivot High/Low Indicator set to 4 (4 weeks or 4 periods). So every time a 4 week new high or low is formed, we get to see a visual marker

Trading Methodology Heiken Ashi High/Low

Scan the chart and look for the most recent high/low pivot levels. Wait for a full Heiken Ashi candle to open/close outside the pivot and place a pending Buy or Sell order on the high or the low of the Heiken Ashi Candle.

For targets: Use past pivot reference points or close the trade when a weekly Heiken Ashi candle closes in the Red (Bearish) or Green (Bullish) for longs and shorts respectively.

Long Trade Example

Heiken Ashi Pivot Long Trade Example

In the chart above, we have an example long trade.

After a pivot high at 1.58214 was formed, we notice a full candle that formed completely outside of this pivot high. So a pending Buy limit is placed on the high of the candle. 7 candles later, the trade was triggered. Stops which would have previously been placed at pivot low of 1.5437 would now be moved to the new recent low at 1.55739, giving a risk of 13.69 pips. After the trade was triggered, there was a continuous bullish rally marked by consecutive green bullish heiken ashi candles. After the first bearish Heiken Ashi candle was spotted, the trade would be closed giving a total profit of 212.3 pips.

Future Examples

GBPCAD Heiken Ashi Pivot (Potential Trade) Example

In the same chart (GBPCAD) we see a pivot high/low formed at 1.86689 and 1.81641. We now look for a full candle to form outside of any of these pivot levels to take a long or short position.

Short Trade Example

Heiken Ashi Pivot Short Trade Example

In the short trade example, we see a full candle that traded below the previous pivot low. A pending sell order was placed on the low of this candle at 0.87207. After the trade was triggered, the stop level is moved to the recent high.

The trade is closed when we see a bullish Heiken Ashi candle yielding a 30 pip profit. Do note that the sentiment exhibited by the Heiken Ashi candle can be questioned and perhaps the trade could have been let to run. Such decisions are solely up to the trader to decide if they want to close the trade in profit or to risk keeping it open, which in this case could have given much more profits.

Why trade the Weekly Heiken Ashi High/Low Method

Easy and simple to understand

Based on the trend following method

Does not use any complicated indicators

Not much of thinking involved and thus traders dont have to spend too much time analyzing trades

Disadvantages

Not much of action

Trades can take anywhere from 2 7 weeks or more to be triggered

This method can seem very boring

Editorial Team

ForexPromos Editorial Team is comprised of a selection of hand picked editors that bring you the latest breaking news from the financial markets. We also provide forex educative articles as well as comprehensive fx broker reviews.

Thread powerful1min scalping system ea

Thread powerful1min scalping system eaThread: Powerful 1 Min Scalping System EA

Powerful 1 Min Scalping System EA

This expert advisor is based on the Powerful 1 Min Scalping System (final template in the first post) presented by Canadian Dude on ForexFactory.

It strictly follows the rules of this system.

Note that I have added a second Heiken Ashi to have the M5 trend filter.

You have to modify the Time Filter settings depending on the location of your broker. The StartHour is supposed to be 3AM and the EndHour. 11AM, both east time.

For people which have a Time Range that includes 0 (midnight), there is the Powerful 1 Min Scalping System EA 0 version.

Attached Files

DoublecciWoody. mq4‎ (5.6 KB, 8148 views)

Heiken_Ashi_Smoothed. ex4‎ (4.6 KB, 7004 views)

Powerful 1 Min Scalping System EA. mq4‎ (16.2 KB, 10066 views)

Powerful 1 Min Scalping System EA 0.mq4‎ (16.2 KB, 7417 views)

Swing trading with heiken ashi and stochastic system

Swing trading with heiken ashi and stochastic systemSwing Trading with Heiken Ashi and Stochastic System

This forex strategy deceptively simple but profitable basic on trend following system. It uses a few of indicators work good on 4 hour charts but other people are using other timeframes successfully.

Indicators you need;

Heiken Ashi candles

SMA 100 Close

Stochastic 8,3,3 low/high

Heiken Ashi candles are "average price" candles. They are calculated using a moving average and change colour according to that average. The open, high, low and close of these candles represent slightly different things to normal candles and the best way to get a feel for them is to put them on your chart and see how they look. If you have metatrader you can go to a line chart and then set line chart to "none" in the chart properties and that gets rid of the line leaving you a nice blank screen to put your HA candles on. Notice how the candles can sometimes stay one colour for a long period of time, hundreds of pips on a 4 hour chart. Catching and holding on to these long trends can be very profitable but of course it is not always as easy as all that!

The 100 sma is there to help visualise the trend. As a basic rule of thumb if the price is above the ma the trend is up and we only want to buy and below is down and we only want to sell.

The stochastics give us information about the strength of the pullback in the trend. I find stochastics to be the best momentum based oscillator to help visualise turns in the trend and they work very well with HA candles.

Basic Method

In an uptrend you want to see a move up followed by a smooth decline in prices signified by green HA candles followed by red. When the HA candle turns back to green and the stochastics make a nice smooth cross towards the bottom of the stochs window then wait for the 4 hour candle to close and open your long trade. In a downtrend you want to see the opposite.

Money Management, Stops and Targets

There is some combination for the best stop loss and target combination to use to capture the most profit from these signals. There are 3 basic methods that I believe are worth testing.

Enter the trade with a 50 pip stop loss. Hold the trade open until the HA candles turn back against the trend moving the stop loss behind the trade as it moves.

Enter the trade with a 50 pip stop loss and a 50 pip take profit moving the stop loss to +1 pip after +25 pips is reached.

Enter the trade with a 50 pip stop loss and take half profit at +25 pips moving the remainder to break even at that point and trailing the stop loss as the trade progresses.

Heikin ashi charts-definition and atrade example

Heikin ashi charts-definition and atrade exampleHeikin Ashi Charts - Definition and a Trade Example

Heikin Ashi Charts Definition and a Trade Example BPT Management 2015-09-16T09:52:52+00:00

Have you every considered using other types of charts to help guide you in making trading decisions? I suggest you take a look at the variety of chart options that you may have in your existing charting package. I would like to give you one example of a trading strategy that I often use to help me in making the decision to trigger and stay in a trade using Heikin-Ashi charts.

First of all, a little back ground on Heikin-Ashi charts. The Heikin-Ashi chart that came after the candlestick chart is one of the several different achievements of early Japanese traders. The visualisation of this type of chart is useful in spotting trends easily. Heikin-Ashi candles are different and each candle is calculated and plotted using some information from the previous candle:

Close = (Open+High+Low+Close)/4

Open = [Open (previous bar) + Close (previous bar)]/2

High = Max (High, Open, Close)

Low = Min (Low, Open, Close)

When plotting this type of chart it provides a little bit of lag but not near the lag as in a moving average as shown in the thumbnail. Thus, it gets you in the trade quickly and keeps you in just until the trend reverses. Lets look at the simple trade set up and follow through:

The trigger is having two same colored bars in the same direction.

The exit is when you have one colored bar in the opposite direction.

If you noticed in the normal 10 minute chart following the same period you would have had several false stop signals. Using different time frames you may use this to help guide you on the trade trigger or help you stay in a trade longer to let your profits runs. Experiment and let us know how you have done …

See our Trader Tip for Heiken Ashi

Forex lines7review

Forex lines7reviewForex Lines 7 Review

Various trading experiences shared by fellow traders about Forex Lines 7. It was as if built on a completely different manner from manual traing method. Can be compared with Smoothed Hieken Ashi (20) that is for long trade mode only. It open at an order to start a new Heiken Bar, then closes at the open of a closed Heiken ashi bar. But it only work this way if the bar is in profit/ above the open bar. If the close bar is below the open Hieken, it is ignored until in the future there is a closed Hieken in profit. It eventually come back to be in profit when testing via mt4 strategy tester.

On the other hand, the author suggest closing all open orders if the 4H trend goes the other way. This trend was based on the 4H chart and Forex Line v7 bases trades on the bar-color indicator (or Hieken Ashi) on a 1/5/15 or 30 min chart. Actually, it depends upon your choice. So by testing it to close trades that are not profitable and if the EA didn’t work well, stick with 1 trade at a time. Most of the trades end up with profit as long as the 4H trend is still going your way. Just leave to default all the settings of the EA. There was a good performance at one minute, so also with the 5-minute performance. With this short experience of the EA, it was actually ok and also, it does not repaint. That’s what great about it.

Click Here to Download A GREAT Trading Tool and Strategy For FREE

Free forex pro charts

Free forex pro chartsThe Mother of Forex Trading Strategies Trade from the Daily Charts

June 02, 2012 JoshTaylor

Forex trading Strategies . Sometimes choosing the right Forex trading strategies in your Forex trading can be very overwhelming. There seems to be 1,000,001 traders out there telling you that they have the best Forex trading strategies for beginners and pros alike. So the question is thisJosh, if I want to improve my Forex trading today, what are the best Forex trading strategies that I can implement..TODAY! I am going to show you one of the best Forex day trading strategies you can use.

Most Forex traders change Forex trading strategies like they change their underwear. They always seem to be search for the holy grail of Forex trading strategies. And of course I personally believe that the holy grail of Forex trading strategies is developing a proper money management plan. But once a trader has their equity management plan and they learn how to trade simple support and resistance from key levels, most of the problems that I see with traders who are struggling with their Forex trading come down to the chart time frame they are trading.

For some reason I see newbie traders trying to trade from the 5 minute charts, trying to scalp the market, and are getting slaughtered. Though trading from the 5 minute charts works well if you are scalping the market, the lower time frame charts can also cause a lot of stress because of the quick movements it can make. So whether you are a complete Forex beginner or you are a seasoned trader who may be struggling with your Forex strategies. I am going to give you my Forex strategy secrets. I am going to suggest that you scrap the lower time frame charts and adopt one of the best Forex trading strategies start trading from the daily charts .

The reality is the lower the time frame of your chart the more noise you are going to see. Lets take a look at a 5 minute chart on the GBP/JPY. If you look at the chart below, though it is not impossible to trade most of the potential trade opportunities are going to be quick, aggressive, and will offer a unfavorable risk/reward. And unless you are a very skill as a Forex scalper, trading from the 5 minute charts is NOT one of the greatest Forex trading strategies you can implement. Price action can be very bouncy on these lower time frame charts. You can see that price is jumping around without much of a definitive direction.

Forex Trading Strategies. The Daily Chart

Now lets take a look at the same currency pair on a daily chart. Each one of these candles represents an entire day. Now, if you are trading from the 5 minute charts you need to be in front of our charts constantly in order to find a solid trade. But when you trade from the daily charts you can plan way in advance what your trade will be because you are going to be taking your trades from key levels. Trading from the daily charts allows you to clearly see when you would find potential trade setups and plan your trades accordingly. We will get more detailed on other Forex trading strategies such as trading from key support and resistance levels and price action on how and where to enter these trades from the daily charts. But for now, I just want to drill into your head to start trading from the daily charts.

Forex Trading Strategies: Using Heiken Ashi Candlesticks

Now, I am not going to get too detailed on one of my favorite Forex trading strategies when trading from the daily charts. And that is the use of Heiken Ashi Candlesticks. In a nutshell, Heiken Ashi candlesticks help to clear out some of the noise from the charts. If you look at the chart above you will see standard Japanese candlesticks. Red candles mean price went down for the day and green means price went up for the day. You can see that the color of the candlesticks can sometimes change from day to day. Now look at the chart below. This is the exact same chart as the chart above but I changed the candlesticks to Heiken Ashi. Do you see how much smoother the chart looks? I will be writing another article on using Heiken Ashi candlesticks shortly.

So in a nutshell folks, if you are struggling with your Forex trading, trying utilizing one of the simplest of Forex trading strategies..start trading from the daily charts. For more Forex trading strategies visit our YouTube Channel. You can also register for free to receive Free Forex training. Forex trading strategies and Free Forex Entry Strategies here.

Heikin ashi trading system

Heikin ashi trading systemHeikin Ashi Trading System

Posted by Mangi Madang 692 days ago

This Heikin Ashi Forex Trading System is a trading system that allows you to stay in with the trend.

I will explain shortly…

Have you ever closed a trade thinking that the market is going to move in the other direction, only to find out later that it was just a “trick” just to make you panic and you bail out quickly….

And guess what happens next?

The market continues in the original trend or direction for another 150 pips!

You are now left scratching your head saying “what the heck did I get out…I should have stayed in that freaking trade!”

This is so frustrating and it happens to all traders.

So how do you solve this or have something tell you not to get out but stay in that trade?

Heikin Ashi Candlestick to the rescue!

WHAT ARE HEIKEN ASHI CANDLESTICKS?

The Heiken Ashi candlestick chart looks like the real candlestick chart but there’s a difference:

in a candlestick chart. each candlestick has four different prices which are: open, high, low close. Each candlestick that is formed after has not relationship with the one the formed previously.

But with heikin ashi candlestick, each candlestick is calculated using some information from the previous candlestick:

If you wan’t to know more here is a brief detail of how the heikin ashi candlesticks calculated and plotted:

Open price=average of the open and close of the previous candlestick

High price=is chosen from the one of the high, open and close price of which has the highest value.

Low price=is chosen from the one of the high, open and close price which has the lowest value

Close price=is the average of the open, close, high and low prices.

Which means each candlestick that is formed on the heikin ashi chart is related to the previous one before it-therefore it causes the heikin ashi to delay-just like a moving average indicator.

TRADING USE OF HEIKIN ASHI

Heikin Ashi candlestick charts are used in the same manner as a normal candlesticks.

However there is an additional feature of heikin ashi that makes them different from standard candlestick charts and it is this:

the colour of the heikin ashi candlestick is supposed to indicate the overall trend direction of the market

which means it ignores the intermediate trend direction which is happening. In other words, it avoids the noise.

In summary: heikin ashi candlestick chart patterns allow you to stay with the overall trend by allowing your to avoid the noise or the minor fluctuations of price that is prevalent in a standard candlestick chart!

That’s all there is for you to know about Heikin Ashi Candlestick Charts

THE HEIKIN ASHI FOREX TRADING SYSTEM

Timeframes: 30m and upwards

Forex Indicators: 918 Exponential moving averages (or you can use this combination of ema’s: 7ema 14ema. 10 ema 20ema or 10ema 25ema

Buy Trading Rules:

When 9ema crosses 18ema to the upside wait for the price to rally away from the ema lines.

After a while, you will see bearish heikin ashi candlestick form and they will come down to touch the 9ema and 18ema lines.

The buy signal entry candlestick is the first bullish heikin ashi candlestick that forms after those bearish candlesticks in step2.

you can buy immediately at market order.

place your stop loss below the low of the entry signal candlestick.

Sell Trading Rules

Its just the exact opposite for buying:

when 9ema crosses 18ema to the downside, wait for price to fall down and completely away from the ema lines.

after a while you will see bullish heikin ashi candlesticks form and will try to go back up to touch the ema lines. Once this happens, you know a sell trading signal may be just around the corner.

The buy sell signal is given by the first bearish heikin ashi candlestick that forms after that those bullish candlesticks in step 2.

sell at market order

place your stop loss above the high of the entry signal candlesticks.

Thread heikin-ashi strategy

Thread heikin-ashi strategyThread: Heikin-Ashi Strategy

Heikin-Ashi Strategy

Heikin-Ashi Strategy. Many traders look for strong trending markets to trade. Heikin-Ashi is a candle formation that recalculates how the candle is formed thus making the identification of trends a little cleaner.

Here is a strategy based on the Heikin-Ashi candles. This looks for an established trend and a growing Heikin-Ashi candle body to enter into the trade. If the price is above the 50 SMA then it looks for buys. If the price is below the 50 SMA then it looks for sell shorts. The money management is trailed with a 100 pip trailing stop.

Add the script/code below to the Intelliscript Organizer. You can accomplish this by copying and pasting the code to your Intelliscript Organizer.

Once you have loaded your strategy into the Intelliscript Organizer, review HOW TO SET UP ALERTS to have it generate audible or email alerts.

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local haClose=HA_Close[0](Close)

local haOpen=HA_Open[0](Close)

local haLow=HA_Low[0](Close)

local haHigh=HA_High[0](Close)

Heiken ashi-macd strategy

Heiken ashi-macd strategyHeiken Ashi-MACD Strategy

We have discussed a number of strategies over the last few weeks and it is expected that many of you should have started making some profits from these strategies after perfecting them on a demo platform. Today, we move on to a much simpler strategy which anybody can start trading with, in the very first week after studying the strategy. This strategy is known as the Heiken Ashi MACD strategy, and will be used on any time frame the trader decides to use. However, we will advise that this strategy be used on the hourly. 4 hour and daily charts only. The higher the time frame charts used, the more pips that can be gained from this strategy.

Indicators

The indicators to be used for this strategy are:

a) The Heiken Ashi indicator

b) The 21-day exponential moving average (21EMA).

The Heiken Ashi indicator is actually an indicator that plots a different kind of candlesticks on the charts. In other words, the Heikin-Ashi candlesticks which are plotted by the Heiken Ashi indicator are a variation of Japanese candlesticks. On the MT4 charts, the Heiken Ashi indicator is found in the Custom indicator folder.

The Heikin-Ashi indicator draws candlesticks which use the open price and closing price data from the previous time period, as well as the open price, high price, low price and closing price data from the current time period, to create a compound candlestick. The Heiken Ashi candlesticks can be seen on this chart and we can see that they are usually plotted on top of the conventional Japanese candlesticks. Therefore in order to visualize them properly, and for the purpose of this lesson, we have adjusted the colours of the Heiken Ashi to blue and red respectively, with blue coloured Heiken Ashi candles representing the bull candle bars and the red-coloured Heiken Ashi candles representing bearish candle bars.

By combining the various price data from the previous and current time periods into one single candlestick, the resultant candlestick ensures that some of the market noise is filtered out so that the trend is captured better. Instead, these candlesticks can be used to identify trending periods, potential reversal points and classic technical analysis patterns.

How are Heiken Ashi candlesticks calculated? The calculation is based on price data from the open-high-low-close prices of the current Heikin-Ashi values and the values, but simply to know how to combine the Heikin-Ashi candlesticks with an indicator that indicates momentum of a new trend such as the MACD histogram.

The strategy is aimed to being able to determine when the existing trend is about to end and new one set to begin. The trader can then get in early on the new trend and pick all the pips that are available from the new move.

So what is the job of the three indicators used for this strategy?

a) The Heiken Ashi indicator will display the candlesticks of the same name over the conventional candlesticks. The candlesticks are coloured, with red candlesticks showing bearish price movement and blue candlesticks showing bullish price movement. Please note that the default settings are red (bearish) and white (bullish), so the colour for the bullish candlesticks must be changed in the dialog box that opens when attaching the indicator to the chart. So when the candlesticks turn red, it is a signal to get ready for e short trade. A blue colour means that the trader should get ready, and watch out for a long trade.

b) The 21-day exponential moving average is the resistance-support line for this trade. The candlesticks coming from above must break below the 21 EMA to provide a sell entry trigger. Price action coming from below with a blue colour is a signal to prepare for a long entry. The candlesticks must break the 21 EMA in order to provide valid trade entry signals. However, if the price action comes from above and ends up bouncing off the 21 EMA, then the colour of the Heiken Ashi candles and the colour of the MACD histogram will determine what the trader should do next. This will be explained later in this document.

c) The MACD histogram is the trade clincher. Coloured with red and blue bars, red bars are a sell signal while blue bars are a signal to buy. The MACD histogram is an improvement in terms of trade performance over the regular MACD indicator. Its in-built algorithm ensures that reversal signals are picked up much earlier with a colour change, as opposed to the conventional MACD indicator which only relies on the signal bars crossing the zero line on the indicator window, by which time any profitable move would have well been on its way.

The trade is taken by putting together all the components of the three indicators that align in the direction of a price movement.

LONG TRADE

The trader should enter long when the following conditions for the three indicators are seen at the same time :

a) The Heiken Ashi indicator candle bars turns blue.

b) The price action has come from below and broken the 21 EMA upwards, or is coming from above and bounces off the 21 EMA. A price action break of the 21 EMA from below along with a short term pullback to the 21 EMA will also qualify to be traded under these conditions.

c) The MACD histogram bars are blue in colour.

The chart below shows the possible entry points for a long trade based on the conditions that we have stipulated above.

What we have here is a one hour chart, which shows the long entry areas along with the pip profits that could have been made from those trades. Being trades taken on an hourly chart, we can see that the best trade profit targets are those which are between 25 and 50 pips of profits. When trades are taken on a daily chart which is a long term chart, the trade targets will obviously be much higher as we shall see on this chart below:

As described, we can see the long entry areas as shown by the black arrows, and we can also see the potential profits that could have been made had the moves been followed from the start points to the end of the trade when opposing signals showed. We can see that with the daily charts, the potential profits have vastly increased to be in the region of 200 to 400 pips. As such, traders should decide on how they want to trade the strategy and use the charts that they find suitable. Intraday traders will find the hourly charts more favourable, and swing/position traders would be more likely to use the daily charts for their activity.

Stop Loss and Profit Targets

The stop loss should be set below the 21 EMA line. The trader should set the stop a few pips below the low of the last candle prior to the upward break of the 21 EMA. This will allow the 21 EMA line to function as the support line that it is supposed to be once it is broken.

The profit target is not usually set at the commencement of the trade. The signal to exit the trade comes when opposing signals set in. These are:

Appearance of a red MACD histogram bar

Appearance of a red (bearish) Heiken Ashi candlestick

These two are the first reverse signals that will appear, as the price of the asset will start to turn downwards from here before it breaks below the 21 EMA. So the trader should exit the trade once any of these two conditions appear on the chart.

SHORT TRADE

The trader should short the currency pair when the three indicators show the following characteristics. Again, these should all be seen at the same time:

d) The Heiken Ashi indicator candle bars assumes a red colour.

e) The price action has come from above and broken the 21 EMA to the downside, or is coming from below in a pullback fashion and is rejected at the 21 EMA.

f) The MACD histogram bars are already red in colour.

The chart below shows the possible entry points for a long trade based on the conditions that we have stipulated above on a daily chart.

What a powerful setup with mega profit that is seen on the first trade shown on this chart. As described, we can see the two short entry areas as shown by the black arrows, and we can also see the potential profits that could have been made had the moves been followed from the start to the end of the trade. The first trade is one of those few times when the market was extremely generous, giving up a little above 700 pips on the first trade, and 293 pips on the second trade.

If the setup is seen on the hourly charts, the profit targets would definitely be much less and the trader is encouraged not to attempt to get greedy by setting over-ambitious price targets. If large profits are sought, they should be sought on the daily charts.

Stop Loss and Profit Targets

The stop loss should be set above the 21 EMA line, with the placement of the stop occurring a few pips above the high of the last candle prior to the downside break of the 21 EMA. This will allow the 21 EMA line to function as the resistance in case a pullback of the price action occurs.

The profit target is not pre-determined. Rather, the trader should aim to exit the trade when:

The bars of the MACD histogram turn blue.

TRADE MODIFICATION FOR BETTER TRADE ENTRIES