- Trading Guide PowerBase
But how do I use this indicator in the daily trading of Heikin Ashi traders? Here are some answers and recommendations that can help you improve or create a trading system - strategy:
Stop Loss. A very useful method to reduce the risk of a transaction is to set the stop loss even behind the last Heikin Ashi bar, assuming that if the next bar is touched the initial signal is invalidated and it is best to close with a limited loss than to you hope the market returns to your favor because it can only happen much later, and in this case you will lose much more than you initially expected.
This type of signal is also simple and relevant, means that the average of the most recent bars has reversed. In a favorable context, this can be a very profitable entry.
Output signal from position. Once again, this signal reflects a reversal or a final trend allowing an objective and strategic exit from position to avoid any type of withdrawal that would be difficult to manage.
Wave Analysis . This method allows the identification of the trend using the Heiken Ashi and Dow theory, which asserts that an ascending trend is represented by a series of higher and higher maxima, while a downward trend will be a series of minima and maximum the lowest. Thus, Heikin Ashi will help you easily and without errors identify the maximum and minimum series to determine the trend.
Renko bars are very useful for intraday traders. Associated with Heiken Ashi, it's easier to use and more relevant! Thus, Heikin Ashi traders can use the following methods with Renko:
Heikin Ashi comes from the Japanese Heikin-Ashi, which means the medium bar.
The Heikin Ashi indicator changes the way the price values are displayed on a graph. The MT4 Heiken Ashi changes the way the prices are displayed on a chart.
The indicator is based on Japanese candles. A Japanese candle presents four price data in visual form, namely:
This is useful because it allows you to see more information for each graphically presented time period.
A candle HA is:
white when HA is bullish
red when HA is bearish
But Heiken Ashi candles can also keep one color for a long time - hundreds of pips on a 4 hour chart.
In other words, the Heinkin Ashi bar shows if the price closes the time period above or below the beginning of the same period. A rudimentary approach is that a red candle from the above graph is descending. The closing price of the price is lower than that of the opening, suggesting a downward pressure on the price.
The same approach suggests that a white candle in the above chart is ascending. Closing higher than opening suggests an upward pressure on price.
In periods of volatility, bullish and bearish candles alternately appear, depending on price fluctuations. The move makes it difficult to identify the trend. This indicator enters this arena. The indicator uses modified candles to solve the problem. Heiken Ashi MT4 candles are similar to classic ones, but instead of using the opening, closing, maximum and minimum values, they use average values for these four price values .
Forex Strategy - Disadvantages
If you're anxious, this strategy does not make you any better.
The precipitated execution of transactions on this strategy, within shorter deadlines than expected (4 hours), could decimate your funds. There will not be multiple entries per day, which could be seen as an advantage for light-weight traders and just the opposite of others.