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Smaller time frame always follow the bigger time frame. It's better wait be patience to enter in position than risk with BIG SL. Having strong trading discipline and taking losses when necessary is a sign of serious trading approach

Friday, July 13, 2012

Heiken Ashi


A collection of simple trading system that may already be familiar to lovers heiken ashi. Where heiken ashi in addition capable of displaying a picture of strength following the price movement trend is also to reduce the “noise” in price movements.
Candle heiken ashi have different basic calculations when compared with ordinary candle on the chart that displays the price includes an open, high, low and close.
As for heiken ashi can be briefly described as follows:

1. Open price; an average of open and close the previous candle.
2. Close price; an average of open, high, low and close price.
3. High price; is an open or close price, which has the highest value.
4. Low price; is an open or close price, which has the lowest value.
Trading system this time only rely on ashi heiken only. In the chart above I use 4 TF heiken ashi as scaning trend direction and heiken ashi smoothed for execution.
2 Heiken ashi with time frame of reference used as the main trend.
You can use this system in the time frame for 1 hour (H1) or if you want to be lazy (like me …;- p) use this system in the time frame for 4 hours (H4).
Buy if:
1. Make sure all the bars heiken ashi blue.
2. Make sure the price is above the heiken ashi smooth which is also colored blue.
3. You can exit the partial if one of the bars on 4HA change color to red.
or you can lock whatever they can profit during the scans the main trend is still showing a bullish trend.
Sell ​​if:
1. Make sure all the bars heiken ashi red.
2. Make sure the price is below heiken ashi smooth which is also red.
3. You can exit the partial if one of the bars on 4HA change color to blue.
or you can lock whatever they can profit during the scans the main trend still shows a bearish trend.
You can download the indicators and the template here:

Heiken Ashi
Heiken Ashi Smoothed
Heiken Ashi Real
Heiken Ashi Oscillator
Heiken Ashi Zone Trade
4TF HAS Bar
Heiken Ashi Alert     note if you find some difficulties about the alert, click this
Heiken Ashi E-mail alert 

heiken_ashi_lover
How To Trade With HEIKEN ASHI ?
In forex or stock market, we can make or lose money when the price goes up and down. We need to be able to predict the direction of the market. Different traders do it using different methods but for most traders, technical analysis of the price charts is the easiest way. So they spend a lot of time to learn technical analysis.

In fact, technical analysis was invented and introduced by Japanese traders and by the invention of the candlesticks. Those who are familiar with the candlestick charts know that candlesticks are the best and fastest tools to understand the condition of the market and the psychological situation of the buyers and sellers.

Japanese traders never stopped improving their technical analysis methods and tools. They worked hard and tried to improve the technical analysis. Heikin-Ashi chart that came after the candlestick chart is one of the several different achievements of Japanese traders.

I don’t say that you can predict faster using the Heikin-Ashi chart, but it is much easier because it eliminates a lot of noise and so it prevents you from taking many of the false signals.

So What Is a Heikin-Ashi chart and How Does It Look Like?

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 than the candlestick chart.

In candlestick charts, each candlestick shows four different numbers: Open, Close, High and Low price (It is recommended to learn the candlesticks first) and each candlestick is independent and has no correlation with the previous candlestick.

But Heikin-Ashi candles are different and each candle is calculated and plotted using some information from the previous candle:

1- Close price: the close price in a Heikin-Ashi candle is the average of open, close, high and low price.
2- Open price: the open price in a Heikin-Ashi candle is the average of the open and close of the previous candle.
3- 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.
4- Low price: the low price in a Heikin-Ashi candle is chosen from one of the high, open and close price of which has the lowest value.

So 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. So Heikin-Ashi chart is somehow like a moving average, but it is much more than that, because it gives more information.

Why Heikin-Ashi is Better for Trading?

As I already mentioned, Heikin-Ashi eliminates the market noise and so it is much better for trading, both for reversal and also continuation signals to follow the trends. This indicator is also great for volatile currency pairs like GBPJPY.

Lets see how the Heikin-Ashi chart looks like and compare it with the candlestick chart. The upper part is Heikin-Ashi chart and the lower part is candlestick chart:

The above chart has two parts. The upper part is the Heikin-Ashi chart and the lower part is the candlestick chart. Numbers 1 and 2 in the candlestick chart show a sell signal whereas if you compare the candlesticks number 1 and 2 with the Heikin-Ashi candles number 1 and 2, you will see that the Heikin-Ashi candles don’t show any sell signal yet. It is just the candle number 3 that shows a signal. So the Heikin-Ashi candles are about one or two candles delayed.

If I wanted to trade using the above chart and with the candlestick chart signals, I would go short when the candlestick number 3 would break the low price of the candlestick number 2 whereas if I wanted to trade only using the Heikin-Ashi chart, I would have to wait for the candlestick number 4 to be formed.

In other part of the chart, the candlesticks number 5, 6, 7, and 8 made another good sell signal. I would go short when the candlestick number 9 broke the low price of the candlestick number 8. But with the Heikin-Ashi chart, I would have to wait for the candle number 9 to be formed completely and also the next candle to break the low price of the candle number 9.

So the Heikin-Ashi chart is delayed and the candlestick chart is much faster and helps us to make more profit. So why should we use a Heikin-Ashi chart? As I have already explained, because of the delay that the Heikin-Ashi chart has, it has less number of false signals and prevent us from trading against the market. On the other hand, Heikin-Ashi candles are easier to read because in contrast with the candlesticks they don’t have a lot of different shapes and formations.

Different candles in a Heikin-Ashi chart:

1- Bullish candles:

When the market is Bullish, Heikin-Ashi candles have big bodies and long upper shadows but no lower shadow. Look at the big uptrend in the below chart. As you see almost all of the candles have big bodies, long upper shadows and no lower shadow.

2- Bearish candles:

When the market is Bearish, Heikin-Ashi candles have big bodies and long lower shadows but no upper shadow. Look at the big downtrend in the below chart. As you see almost all of the candles have big bodies, long lower shadows and no upper shadow.

3- Reversal candles:

Reversal candles in the Heikin-Ashi charts look like Doji candlesticks. They have no or very small bodies but long upper and lower shadows. Look at the reversal candles in the below chart:

How can you use the Heikin-Ashi chart in your trades?

I know that some traders only use Heikin-Ashi to trade but I don’t agree with it. As you saw Heikin-Ashi is delayed. So it is good for trading volatile currency pairs like GBP-JPY and with small time frames. It is good for intraday trading and scalping using small time frames like 5 minutes or 2 minutes. It is not suitable for big time frames like daily and 4 hours because you will be too late in many cases and so you have to close your trade before you make any profit.

Have both the candlestick and Heikin-Ashi on your chart and add a 14, 7, 3 Stochastic. Buy when both of the Stochastic fast and slow lines go up from the oversold area and at the same time both the candlestick and Heikin-Ashi charts show reversal signals. Sell when both of the Stochastic fast and slow lines go down from the overbought area and at the same time both the candlestick and Heikin-Ashi charts show reversal signals.

Look at the below 2 minutes chart and see two short trade and one long trade opportunities:

Two good trades in the 15 minutes chart:

A good short trade in 5 minutes chart:


A good long trade in the 5 minutes chart:

Keep in your mind that you have to try any new system with the demo account and if it worked, you can use it with the real account.

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Heiken Ashi Zone Trade



Gray means there is no definite trend, thus no trading.
If you get a gray bar while in the trade, expect the trend to stall.
Bring closer your stop and watch if the trend is going to resume or change direction.
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I see that forex traders and also stock traders look for Heikin Ashi and smoothed heikin ashi more and more everyday. Maybe because Heikin Ashi eliminates a lot of noise and shows a clearer and sharper direction.

In this article, I am helping you have the Heikin Ashi or the Smoothed Heikin Ashi on your MT4 platform easily. MetaTrader (MT4) already has Heikin Ashi that can be easily added to the price chart but it has some problems:
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The problem is that it covers the candlestick and so you can not see either the candlesticks or Heikin Ashi properly:
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However, you can see the Heikin Ashi properly by changing the colors and making the candlestick chart invisible. Here I am helping you have clear and proper Heikin Ashi chart in a few easy steps and without having to change the colors on your own. I have already done it for you.

Place the below file in the indicators folder (e.g. C:\Program Files\Meta Trader 4\experts\indicators\):

Note: To save the files on your computer hard disk, just right click on the below links and click on “Save target as …” and then “Save”. Do not change the files name:
Heiken Ashi.ex4

Then put the below file in the templates folder (e.g. C:\Program Files\Meta Trader 4\templates\):
heikin ashi.tpl

Now close your MetaTrader and restart it. Then right click on the price chart and choose the Heikin Ashi from the templates.
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You will have the below chart then. You can add any other indicator to it and also use it with any time frame.
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The above chart is the ordinary Heikin Ashi but we also have another kind of Heikin Ashi which is called Smoothed Heikin Ashi. It is slower than the ordinary Heikin Ashi and eliminates a lot of noise. For me it is too slow and so I don’t use it. It works like a 10 or 20 moving average. You can try it and see if it works for you.

To have the Smoothed Heikin Ashi chart make sure that the below file are place in the indicators folder (e.g. C:\Program Files\Meta Trader 4\experts\indicators\ folder):
Heiken_Ashi_Smoothed.ex4

Also place the below file in the templates folder (e.g. C:\Program Files\Meta Trader 4\templates\ ) and then restart your MetaTrader:
smoothed heikin ashi.tpl

Now open a new chart, right click on it and choose the Smoothed Heikin Ashi from the templates list. You should have the below chart then. The green line is the price line. You can make it invisible by changing its color to black but I think you’d better to keep it to know the difference of the real price movements and what the Smoothed Heikin Ashi shows you.
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