The Heiken Ashi Algo Oscillator (Range Trading technique)
You're watching this video because you keep getting stop-hunted. You feel like every time you enter a trade to the market it immediately goes the other way and you get this little spike out the top or the bottom of a candle that knocks you out of your position and takes out your stop loss. This is most likely due to Market manipulation on your charts which is making you think that price is moving up or down and instead you have just entered a trade at the beginning of the consolidation or distribution phase. Don't worry you're not alone this happens to a lot of novice and intermediate Traders. I really wish there was an indicator that would tell you as soon as you have entered into a ranging Market but usually you can't tell that until you've looked at your charts for a couple of hours and realize that price hasn't moved above or below a certain number.
Well you're in luck because I just finished coating an indicator that will tell you that you have entered into a consolidation or distribution phase at the beginning.
In today's video I'm going to show you how to do range trading using the Heiken Ashi Algo Oscillator available for free on Tradingview.
Usually after price makes a big rally to the upside or to the downside you can expect that price is going to go into either consolidation or a distribution phase.
On your charts this will look like where price runs flat for what could be an extended period of time. The rule of thumb is that after a very strong move to the upside or downside the consolidation period can be lengthy. If there is a short rally to the upside or downside then the consolidation or distribution phase would be a short period of time.
So lets get into adding the indicator, and setting up your chart to trade in ranges using alerts from the Heiken Ashi Algo Oscillator.
Open up TradingView
Go to your indicators tab and search for Heiken Ashi Algo Oscillator and add it to your chart.
In the settings make sure you've turned on the following:
Range
Range Break Long
Range Break Short
Support Levels
Resistance Level
There are a number of other alerts available in the Oscillator but we don't need them for this purpose. And as always, use the default settings.
When you get a RANGE signal (Which looks like a line between two left and right arrows.) You want to grab your Parallel Channel Tool.
You should have already set your support and resistance levels when you opened your chart for the day so look left of your candle. There should be a support or resistance alert right there. On my chart I have a Resistance level.
So I'm going to use this line at the top of my parallel Channel
Take your parallel channel tool And place it on that support resistance level just left of the candle .
I'll drive it far to the right and make sure it's straight and click again.
now drag it down to the closest support level and click again.
You have just drawn your range.
Also on my chart you can see here that I have 1 range indication and then just after it I have a second range indication. When you get a second one you disregard the first one because price has now entered into a new range.
What you are looking at is the Centerline of your range. In this particular instance the first Range Line is lower than the second one so to correct this I have to take the top of my parallel Channel and drag it up until the dotted line is at the close of the candle with the new Range signal. do this by driving the top of the box and not changing the bottom of a box. In this case you can see how the bottom of the parallel channel is still sitting on my support and resistance level to the bottom but the top of the parallel Channel is above my support and resistance level And this is fine.
The way you use this is by imagining your parallel channel has three levels.
Level 1 = The top line
Level 2 = The midline
Level 3 = The bottom.
Also you must respect any Support and Resistance levels traveling THROUGH the Parallel Channel
What you are looking for is any candle that closes its majority size across one of these lines here are some examples:
Please watch the video for a perfect visualization of how to do this.
Directions of Trades in Range Trading. Follow the arrows.
You ONLY trade to the INSIDE from the top or bottom of the channel.
You also trade either up or down FROM the midline, depending on the majority close of the candle.
Again also respect your support or resistance levels when a candle is crossing them.
Well you're in luck because I just finished coating an indicator that will tell you that you have entered into a consolidation or distribution phase at the beginning.
In today's video I'm going to show you how to do range trading using the Heiken Ashi Algo Oscillator available for free on Tradingview.
Usually after price makes a big rally to the upside or to the downside you can expect that price is going to go into either consolidation or a distribution phase.
On your charts this will look like where price runs flat for what could be an extended period of time. The rule of thumb is that after a very strong move to the upside or downside the consolidation period can be lengthy. If there is a short rally to the upside or downside then the consolidation or distribution phase would be a short period of time.
So lets get into adding the indicator, and setting up your chart to trade in ranges using alerts from the Heiken Ashi Algo Oscillator.
Open up TradingView
Go to your indicators tab and search for Heiken Ashi Algo Oscillator and add it to your chart.
In the settings make sure you've turned on the following:
Range
Range Break Long
Range Break Short
Support Levels
Resistance Level
There are a number of other alerts available in the Oscillator but we don't need them for this purpose. And as always, use the default settings.
When you get a RANGE signal (Which looks like a line between two left and right arrows.) You want to grab your Parallel Channel Tool.
You should have already set your support and resistance levels when you opened your chart for the day so look left of your candle. There should be a support or resistance alert right there. On my chart I have a Resistance level.
So I'm going to use this line at the top of my parallel Channel
Take your parallel channel tool And place it on that support resistance level just left of the candle .
I'll drive it far to the right and make sure it's straight and click again.
now drag it down to the closest support level and click again.
You have just drawn your range.
Also on my chart you can see here that I have 1 range indication and then just after it I have a second range indication. When you get a second one you disregard the first one because price has now entered into a new range.
What you are looking at is the Centerline of your range. In this particular instance the first Range Line is lower than the second one so to correct this I have to take the top of my parallel Channel and drag it up until the dotted line is at the close of the candle with the new Range signal. do this by driving the top of the box and not changing the bottom of a box. In this case you can see how the bottom of the parallel channel is still sitting on my support and resistance level to the bottom but the top of the parallel Channel is above my support and resistance level And this is fine.
The way you use this is by imagining your parallel channel has three levels.
Level 1 = The top line
Level 2 = The midline
Level 3 = The bottom.
Also you must respect any Support and Resistance levels traveling THROUGH the Parallel Channel
What you are looking for is any candle that closes its majority size across one of these lines here are some examples:
Please watch the video for a perfect visualization of how to do this.
Directions of Trades in Range Trading. Follow the arrows.
You ONLY trade to the INSIDE from the top or bottom of the channel.
You also trade either up or down FROM the midline, depending on the majority close of the candle.
Again also respect your support or resistance levels when a candle is crossing them.