Very recently, many traders have started to see the benefits of using heiken ashi charts, a Japanese designed market indicator. Heiken ashi charts come in the form of candlesticks, with the size and colour of the candle, as well as the placement of the wick being indicative of certain market trends. Traders are now praising heiken ashi for their profitability. A trader will profit from using these charts as the decisions they make about the market can be far more accurate.
It is always beneficial to consider new ways of trading the stock markets, and the heiken ashi average bar seems to be the way forward. Heiken ashi charts assist traders in seeing a clearer picture of market trends, as the way in which they are calculated works to eliminate market noise (erratic fluctuations which can distract from the true direction of the market).
In terms of interpreting the colours of the charts, the candlesticks will often come in two colours; red and green. Green candles show a strong trend, which means your profits could benefit from a long trade in such a case. By contrast, red candlesticks are communicating that the current trend has ceased, and therefore short trades will be a better idea.
If you are seeking to make the most money through adding heiken ashi to your system, you will do well to use the charts alongside another variety, so as to improve the accuracy of your predictions. Another chart you might use is Bollinger Bands. If you are not familiar with this kind of chart, it consists of volatility bands which are situated on top and underneath a moving average. The following are some tips for profitability when combining the two types of chart.
If the candles on the heiken ashi are green and the price touches the lower Bolinger Band with the middle Bolinger Band being flat then you should start a long trade. Alternatively, if the candles on the heiken ashi are red and the prices touches the upper Bolinger Band with a flat middle band then a short trade will be a good idea.
Before you begin using heiken ashi charts in your trading you must ensure that you fully understand how they work and what the different forms of candlesticks mean first. A quick how to guide will set you up well on the path to make more money by trading the stock markets.
As its benefits become more widely reported, increasing numbers of traders are converting to the heiken ashi method. Of course, there is no 100% foolproof method for successful trading, the key is to be clever in the way you use the market indicators available to you. It also takes time and study to become truly skilled at trading with your chosen method, so a little time and dedication, alongside the use of heiken ashi can go a long way to seeing your profits rise over time.
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