Saturday, April 21, 2012

Heiken-ashi candlesticks

Heiken-ashi candlesticks versus Japanese candlesticks

Heiken-ashi candlesticks are also called sometimes Heikin-ashi candlesticks.

Heiken-ashi candlesticks provide interpretation of market trends in a neat and descriptive way.

 Unlike regular Japanese candles, Heiken-ashi don't show open, high, low and close. Instead they calculate values of each candlestick based on the dominant forces in the market. E.g. if bears (sellers) are clearly dominating, Heiken-ashi candlesticks will be bearish (red), even if a price bar closes higher than it opened.

These Heiken-ashi candles are a perfect tool for traders who like following trends to their very extend. Heikin-ashi Candles also looks much more simplified.

The rules of reading Heiken-ashi candlesticks

Sellers are dominating, strong downtrend

Buyers are dominating, strong uptrend

The trend got a bit weaker, watch out

With a change of a color of a Heikin-ashi candle - trend has changed

Heiken-ashi charts vs Japanese candlestick charts

A regular Japanese candlestick chart:

A chart with Heiken-ashi candlesticks:

The trends on Heiken-ashi charts have more distinguished and smoother look.

But this doesn't limits the use of Heiken-ashi candles in Forex.

Heiken-ashi candlesticks are good at suggesting trading and also trailing stops.

A trailing stop is placed at the bottom of a bullish Heiken-ashi candlestick in an uptrend and at the top of a bearish candlestick in a downtrend. A top is adjusted with each new fully formed candlestick.

Heiken-ashi candles are truly amazing candles to trade with!





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