- 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:
scalping
intraday
day trading
- Definition
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:
opening
close
maximum
minimum
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
