QuantitativeExhaustion

Heiken Ashi Candlestick vs. Normal Japanese Candlestick

FX:EURUSD   Euro / U.S. Dollar
32064 19 54
Heiken Ashi candlestick filters out some noise in an effort to better capture the trend. For those that use trailing stops and are trend traders, flipping back between the two candlestick charts is quintessential for traders. In the chart I showed how a trader could use trailing stops to profit from the biggest trends. He or she would set stops with long or short positions and use the previous Heiken Ashi candlestick (green or red - lower or higher) as a gauge to stay in a trade or to get out of a trade. Overal Heiken Ashi is a chart I will look at often to know if I'm on the right side of the trade.

For more information here is a free PDF/e-book (Nani Desu Ka) on Heiken Ashi http://www.earnforex.com/forex-e-books/trading-strategy/Using_The_Heikin_Ashi_Technique_D_Valcu.pdf
Why do the candlestick bodies vary in length and size so severely? Might it affect trend lines? For example, can you please take a look at the last candlestick of each image below. Is this why you switch between charts? Japanese to confirm trends , channels, and patterns? Heiken Ashi to determine price direction and impulsivity? Thanks kindly for taking the time. Great post.








+1 Reply
can one overlay the actual data points
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Piqued my interest. Thanks!
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Very Informative! Thanks :)
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Thanks for the information on trailing stop using heiken ashi. I will be sure to add it in my next article to give more information to my readers.

I have an article posted about some of the ways to enter a trade using heiken ashi. If some of the readers here are interested. The link is http://www.investorshack.com/heiken-ashi-candle/
+1 Reply
I don't understand how you are determining when to close a position and when not to, I see long positions being closed when the HA candles are still green and the bottom of the HA candle is above the bottom of the previous candle. but they were left open though times when the HA bars turned red, like from Aug 20 2012- Sept 16 2012 in the main chart you posted. Also how do you determine how many pips to use for trailing stops?

Thanks for the nice post
+7 Reply
Trailing stop should be where the candle stick tail ends, if long bottom tail of previous closing candle, if short top tail of previous closing candle.

Follow the PDF for more instructions on when to enter or when to exit.
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I'm not an avid HA trader, i was simply presenting an idea, because when I published this chart HA was new to TradingView.
+1 Reply
zmm20 zmm20
This chart for instance -

How do you determine to close where you did rather than waiting for the red HA candle?
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If I remember right, chart more than two years old, it's based on the previous candle body. If a candle body is red while in a trend and the body closes below the previous HA candle, then you exit the trade.
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