What are Heiken Ashi Candles?
Heiken Ashi, derived from the Japanese term ‘Heikin Ashi,’ translates to average price bars. It’s an indicator depicting price bars on a chart.
Formula for Heiken Ashi candles:
– Heiken Ashi opening price: (previous candle’s opening + closing price) / 2 – Closing price Heiken Ashi: (opening + high + low + closing) / 4 – Heiken Ashi peak: Max of high, opening, or closing price – Heiken Ashi bottom price: Min of low, opening, or closing price
How to Read Heiken Ashi Chart?
Four main signals for trend and trading analysis:
1. Blue candles indicate an uptrend, suggesting buying or exiting sell orders. 2. Small-bodied candles with upper and lower shadows signal a possible trend change, acting as a decision point. Enter early for trend prediction or wait for more signals. 3. Red candles signify a downtrend, prompting selling or exiting buy orders. 4. Red candles with no upper shadow indicate a robust downtrend, advising continued selling until the trend reverses.
Using Heiken Ashi MT4 Candles
Trading with Heiken Ashi on MT4:
– Blue indicates an uptrend, suggesting buying. – Red indicates a downtrend, suggesting selling. – Buy after the first closed blue candle; sell after the first closed red candle. – Combine with candlestick patterns, price trends, and support/resistance for optimal entry areas.
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