Heiken Ashi indicator
The Heiken ashi indicator is quite a qualitative indicator capable of determining the current mood of the market very accurately.
This Heiken Ashi indicator is in the form of Japanese candles, which are painted according to a different algorithm than standard candles in the terminal.
When calculating candles using the Heiken ashi indicator method, the following formulas are used:
First there is the average price of the current candle, which will be the closing price = (opening the candle maximum minimum closing)/4
Then there is the average opening price of the previous candle, which will be the opening price = (opening the previous candle closing the previous candle)/2
Maximum is calculated as = maximum value (maximum, open, close)
Minimum selected from minimum values (minimum candle, open, close)
It turns out that the candles come out smoothed, so they show the trend very well, and the stronger the trend, the more shadow of the candles in the direction of the trend line.
Now let 's look directly at the application of this Heiken Ashi indicator in trade. This indicator itself, like the rest of the trend indicators, is unable to properly provide signals to enter the market. Therefore, it is best used in conjunction with the Stochastic indicator, then signals to enter very profitable deals will not keep themselves waiting.
In order to sell, the chart of the stochastika must show the intersection of the lines in the overbought zone, and the candles of the Heiken ashi indicator must be painted red. The stop loss is set at the local maximum, the profit fixing level is set at a ratio of 1:2 to the foot, or the deal closes when the candle changes its color to green.
In order to buy, the stochastic must form an intersection after being in the resale zone, and the indicator candles must become green. The levels of profit fixing and loss limitation are put in the same way as for sale: stop is put as a local minimum, teak profit is put in a ratio of 1:2 to foot or the transaction is closed when candles become red.