This idea should be considered as an extra to my previous one.
Firstly I should warn you that the Chart type we use is not a simple Candlestick Chart.
Heikin-Ashi or "average bar" in English uses candles for charting as a usual candlestick chart, but to build them it takes different calculations. Heikin-Ashi uses the average between Open-High-Low-Close (from the usual chart) to build its close price or current price if candle is not closed yet. And to build the open price for its candle it uses the average between Open of Prev. Candle and Close of Prev. Candle (from the Heikin-Ashi Chart itself).
So how this type of Chart can be useful to us? Because this Chart takes an average of the movement, it gives us a smoother look. There is a tendency with Heikin-Ashi for the candles to to stay red during downtrend and green during uptrend (blue in my case).
Let's see how it works in practice. Before I start I should remind you that crossovers between 20 and 121 MAs define main trends on a daily chart. Or the crossovers between 19 MA and a Price Chart on a weekly chart. (Plus the confirmation on RSI for both charts). Check out some of my previous ideas where I explained why these MAs are trustworthy and how they can be used in conjunction with RSI. So on this chart (which is weekly) I already marked where these crossovers occured and where main trends took its directions. Pay attention on the behavior of Heikin-Ashi during these trends:
During Uptrends we see big clusters of Bull Candles with almost no bearish candles. Conversely during Downtrends we see big clusters of Bear Candles, though sometimes we can meet little clusters of bull candles too, but they were not able to fix above the 19 MA. (Plus in some of my previous ideas I gave the tools that can be used with a usual Candlestick Chart in order to avoid fakeouts). We can use the Heikin-Ashi in conjunction with the Usual Candlestick Chart in order to see if it conforms the trend.
Current situation: As I wrote in my previous analysis the bearish signals overwhelm, plus the behavior of the price (which drop after meeting resistances) and the behavior of indicators (RSI, MFI) all tells the Downtrend will continue. So now we see that Heikin-Ashi confirms this idea too. More than that the Heikin-Ashi showed the bearish behavior since corrective triangle happened.
At last: Although this type of Chart might seem very useful, you should never use it on its own, also do not try to analyze the whole market with this type of Chart. It should be used only as a confirmation.
Screenshot in addition: Crossovers between 20 and 121 MAs on a daily chart
Remember: Despite that we have a lot of bearish signals. We should keep in mind other scenario too, because market is not static. In my previous idea and ideas before I explained how the tools (that I gave in my previous ideas) can be used to provide reliable signals and help to avoid the fakeouts. All the concepts and tools which have been given in my ideas will help you to be well-prepared for each market situation. And now you have one more useful tool)
Thank you for reading this idea! Hope this analysis has been useful to you and will help you to improve your own strategies and methods. Which will make your life more profitable) (but do not gamble)
Please if you like the idea hit the like bottom in order to support this work. Also share your own opinion and charts in the comments below.
Remember this analysis is not 100% accurate. No single analysis is. To make a decision follow your own thoughts.
The information given is not a Financial Advise.
Firstly I should warn you that the Chart type we use is not a simple Candlestick Chart.
Heikin-Ashi or "average bar" in English uses candles for charting as a usual candlestick chart, but to build them it takes different calculations. Heikin-Ashi uses the average between Open-High-Low-Close (from the usual chart) to build its close price or current price if candle is not closed yet. And to build the open price for its candle it uses the average between Open of Prev. Candle and Close of Prev. Candle (from the Heikin-Ashi Chart itself).
So how this type of Chart can be useful to us? Because this Chart takes an average of the movement, it gives us a smoother look. There is a tendency with Heikin-Ashi for the candles to to stay red during downtrend and green during uptrend (blue in my case).
Let's see how it works in practice. Before I start I should remind you that crossovers between 20 and 121 MAs define main trends on a daily chart. Or the crossovers between 19 MA and a Price Chart on a weekly chart. (Plus the confirmation on RSI for both charts). Check out some of my previous ideas where I explained why these MAs are trustworthy and how they can be used in conjunction with RSI. So on this chart (which is weekly) I already marked where these crossovers occured and where main trends took its directions. Pay attention on the behavior of Heikin-Ashi during these trends:
During Uptrends we see big clusters of Bull Candles with almost no bearish candles. Conversely during Downtrends we see big clusters of Bear Candles, though sometimes we can meet little clusters of bull candles too, but they were not able to fix above the 19 MA. (Plus in some of my previous ideas I gave the tools that can be used with a usual Candlestick Chart in order to avoid fakeouts). We can use the Heikin-Ashi in conjunction with the Usual Candlestick Chart in order to see if it conforms the trend.
Current situation: As I wrote in my previous analysis the bearish signals overwhelm, plus the behavior of the price (which drop after meeting resistances) and the behavior of indicators (RSI, MFI) all tells the Downtrend will continue. So now we see that Heikin-Ashi confirms this idea too. More than that the Heikin-Ashi showed the bearish behavior since corrective triangle happened.
At last: Although this type of Chart might seem very useful, you should never use it on its own, also do not try to analyze the whole market with this type of Chart. It should be used only as a confirmation.
Screenshot in addition: Crossovers between 20 and 121 MAs on a daily chart
Remember: Despite that we have a lot of bearish signals. We should keep in mind other scenario too, because market is not static. In my previous idea and ideas before I explained how the tools (that I gave in my previous ideas) can be used to provide reliable signals and help to avoid the fakeouts. All the concepts and tools which have been given in my ideas will help you to be well-prepared for each market situation. And now you have one more useful tool)
Thank you for reading this idea! Hope this analysis has been useful to you and will help you to improve your own strategies and methods. Which will make your life more profitable) (but do not gamble)
Please if you like the idea hit the like bottom in order to support this work. Also share your own opinion and charts in the comments below.
Remember this analysis is not 100% accurate. No single analysis is. To make a decision follow your own thoughts.
The information given is not a Financial Advise.
