How I used Heiken Ashi bars to trade a long USD ETF

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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 :)
Well done! Now I'm interested in Heiken Ashi. Do you remember the youtube video you mentioned?
novimon paulo76
I'm also interested in this!
+1 Reply
Here ya go:
I had to search youtube on it and I found other videos that other people have done as well. I may check them out later.
Heres another good one I just watched:
Well done! Very good trade – well thought thru.
Arek JP
Well done.
I have the same counting as you do. What I like here is that the corrective 4th wave is an abcde/triangle while the corrective wave 2 appears to be a zigzag. This fulfills the alternating rule of Elliott Wave giving us more confidence that what we are seeing now could be a 5th wave of a minor degree.
The idea of using Heiken Ashi as entry/exit point is clever; however, I like to use some other confirmation along with it. Specially when riding wave 3 and 5 I usually wait for tops breakthrough of wave 1 and 3 respectively.
ThirdWaveUp againstthegrain
Yes alternation is a good indication. I like triangles because the breakout is a good confirmation. I've had more luck trading after a triangle than any other formation. As for Heiken Ashi, that to me is only a triggering mechanism. One should certainly have some sort of confirmation mechanism as well. The person who had a video on this likes to use MA lines with a nice slope as well as MACD tools.
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