How to Trade with the Heikin Ashi Indicator

What is the best way to trade Heikin Ashi？

Using a Heikin Ashi chart, as described in a prior course, makes identifying trends easier.

Traders can use Heikin Ashi to seek for the introduction of new trends or the reversal of existing trends.

Heikin Ashi charts can be used in five different ways in trading.

1. An uptrend is indicated by green candlesticks.

It's a hint that the price is about to shift higher when the Heikin Ashi candle turns from red (bearish) to green (bullish).

You may wish to exit if you're currently in a short position.

If you're in a long position right now, you might want to add to it.

2. A strong uptrend is indicated by green candlesticks with no lower shadow or wick.

A significant rise can be shown if there are a number of green shaved bottoms.

Stay as long as you can until the color of the Heikin Ashi candlestick changes from green to red.

Allow your profits to run while riding the rise as long as no lower shadows materialize.

3. Small candlesticks with upper and lower shadows indicated a possible trend reversal (or trend pause).

Because the present trend may be coming to an end, open a position on the opposite side of it.

Keep in mind that changing the color of the following candlestick does not always indicate the conclusion of a trend; it could simply be a pause.

4. A downtrend is indicated by red candlesticks.

When the Heikin Ashi candle turns red (bearish) from green (bullish), it indicates that the price is about to fall.

You may wish to quit a long position if you're currently in one.

If you're currently in a short position, you should consider adding to it.

5. A strong downtrend is indicated by red candlesticks with no upper shadow or wick.

Have you noticed how many people have their heads shaved red？ That's a significant downward trend.

Keep it short until the color of the Heikin Ashi candlestick changes from red to green.

Stay short and ride the decline as long as there are no upper shadows, then take your winnings.