How I used Heiken Ashi bars to trade a long USD ETF
Recently I watched a youtube video on a successful trader's system. He uses Heiken Ashi bars as a triggering mechanism. I applied this with my knowledge of Elliott waves.
First, Elliott waves unfold in progressions of 5 waves. Three of those waves (1,3 and 5) are price movers, known as motive waves. The other two (2 and 4) are corrective waves. In this chart I observed a triangle (commonly known as a wedge) in the 4th wave correction. Suspecting that a 5th wave would follow, I waited for the trigger (a GREEN Heiken Ashi bar). Waves 1 and 2 are not within the window if this chart.
Heiken Ashi bars are range bars. Green bars indicate an upward range and red indicates a downward range. When you switch to Heiken Ashi, notice how nicely all the green and all the red bars group together. The basic approach is to use a bar color change as an entry trigger. When the bar changes color again, take your profits. Pretty simple. Check out my comments on the chart. I hope this helps :)
First, Elliott waves unfold in progressions of 5 waves. Three of those waves (1,3 and 5) are price movers, known as motive waves. The other two (2 and 4) are corrective waves. In this chart I observed a triangle (commonly known as a wedge) in the 4th wave correction. Suspecting that a 5th wave would follow, I waited for the trigger (a GREEN Heiken Ashi bar). Waves 1 and 2 are not within the window if this chart.
Heiken Ashi bars are range bars. Green bars indicate an upward range and red indicates a downward range. When you switch to Heiken Ashi, notice how nicely all the green and all the red bars group together. The basic approach is to use a bar color change as an entry trigger. When the bar changes color again, take your profits. Pretty simple. Check out my comments on the chart. I hope this helps :)