Heikin-Ashi chart looks like the candlestick chart but the method of calculation and plotting of the candles on the Heikin-Ashi chart is different from the candlestick chart. In candlestick charts, each candlestick shows four different numbers: Open, Close, High and Low price. Close price: Heikin-Ashi candle is the average of open, close, high and low grafico heikin ashi forex. Open price: Heikin-Ashi candle is the average of the open and close of the previous candle.
High price: the high price in a Heikin-Ashi candle is chosen from one of the high, open and close price of which has the highest value. Low price: the high price in a Heikin-Ashi candle is chosen from one of the high, open and close price of which has the lowest value. Heikin-Ashi candles are related to each other because the close and open price of each candle should be calculated using the previous candle close and open price and also the high and low price of each candle is affected by the previous candle. This could be an advantage in many cases of volatile price action. This day trading strategy is very popular among traders for that particular reason. It’s also very easy to recognise as trader needs to wait for the daily candle to close. Once new candle is populated, the previous one doesn’t re-paint.
You can access Heikin-Ashi indicator on every charting tool these days. How do I trade with it? The very simple strategy using Heikin-Ashi proven to be very powerful in back test and live trading. The strategy combines Heikin-Ashi reversal pattern with one of the popular momentum indicators. Once the price prints two red consecutive candles after a series of green candles, the uptrend is exhausted and the reversal is likely.
If the price prints two consecutive green candles, after a series of red candles, the downtrend is exhausted and the reversal is likely. The raw candle formation is not enough to make this day trading strategy valuable. Trader needs other filters to weed out false signals and improve the performance. We recommend to use a simple Stochastic Oscillator with settings 14,7,3.
I strongly advise you read Stochastic Oscillator guide first. Enter short trade after two consecutive GREEN candles are completed and the Stochastic is below 30 mark. To further improve the performance of this awesome day trading strategy,other filers might be used. I would recommend to place stop orders once the setup is in place. In the long setup showed in the chart below, the trader would place a long stop order few pips above the high o the second Heinkin-Ashi reversal candle.
The same would apply to short setups, trader would place a sell stop order few pips below the low of the second reversal candle. As another tool you could use the standard Accellarator Oscillator. This is pretty good indicator for daily charts. It re-paints sometimes, but mostly it tends to stay the same once printed. Every bar is populated at midnight.
After Heikin-Ashi candles are printed, confirm the reversal with Accellarator Oscillator. Don’t enter the market straight after a volatile price swing to one direction. It important to consider fundamental news in the market. Move position to break even after 50 pips in profit. Move stop loss at the major local lows and highs or if the opposite signal is generated. Stop loss 100 pips flat or use local technical levels to set stop losses. Every trader is advised to implement their own money management rules.