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Heiken Ashi Trading System


Free Binary Options Strategies


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Heiken Ashi Trading System
Description:

   HAPPY New Year Everyopne!

 
     We are starting to get back in the swing of things and getting started with our plans for the new year. While most of December we were not as active on this site and I noticed a few emails all asking for more information about the Heiken ashi indicator and how we use it. So the first thing we decided to do this year is to do a video on how to trade the heiken ashi candlesticks. There is a video tutorial below and we are including a template with some of the indicators that I used in the video. The central focus is the Heiken ashi and slope direction along with price action on the top chart but I added an RSI on the bottom for a little more confluence for those who want to be EXTRA conservative.
 
HERE is a video where I explain this indicator in detail and take a live trade while I am explaining it:
 
 
Here is a simple check list to help you read this indicator and template we have put together better
 
Looking for trend based CALLS when:
1. Heiken Ashi is Blue: The earlier you can spot this change along with the other factors the better. Notice
that in the video above when I took the trade Heiken ashi had BEEN blue for some time and that is one of the reasons I said it was a harder place to trade. Earlier is better when there is mostly confluence ( agreement ) with the other stuff I am going to mention next. Heiken ashi should be trading above Slope direction NOT flat angled or close crossing it back and forth ( You want to strike when the iron is hot not just warm )
 
2. Slope direction is BlUE: When the slope direction is BLUE: This needs to be below Heiken ashi and a stronger sign is if there is some distance and there is a bit of an uptrend angle you can spot with your eyes ( and others can likely see as well ). So remember trade what you see not what you think you might be seeing if needed ask for someone else's opinion.
 
3. Price action on the chart: Price should be trading in an up trend and there are 2 ways to trade this price action.
A) Wait for a pullback with a red candle digging into the heiken ashi but take note in strong momentum up this might not happen and so on a 15M chart you must be prepared to wait 1 hour or more. Another thing is like I said in the video if the PULLBACK is very strong and crosses Heiken ashi it could be that the move is over or pausing at least. So this means you will need to practice and get used to trading heiken ashi like this.
 
B) Just catch the ride on momentum: If you interpret momentum as being strong meaning everything I just talked about above is in order.
1. Price action is above Heiken ashi smoothed on the charts and candles have been painting green up candles.
2. Heiken ashi is above slope direction with some space in between and not touching slope direction.
3. Slope direction is BLUE and angled up along with price and heiken ashi.
 
SUPPLEMENT indicators:
  
4. RSI: When RSI is trading above that top line then the trend going up is stronger if it is in between the 2 lines then the trend is probably better interpreted as neutral and no mans land.
 
5. BOT Round numbers: When we are close to a line for a round or whole number that price has stopped at recently before, be careful. This may mean that traders on the futures or Forex market are protecting that number and even with momentum, price might stop there in some cases. Also another more important place in our opinion is when we are near the RED line on the chart because that is the average swing UP of the day and you might not have as long a ride left on momentum UP at that point in the trading day. So if you are trading spot FX or a spread on Nadex most of the ride MIGHT be over. Also if you are trading EUROPEAN style binary options the market may reverse or at least get choppy around this RED line from the round numbers indicator and that can equal a nail biter trade at best.
 
 
Looking for trend based PUTS when:
1. Heiken Ashi is RED: The earlier you can spot this change along with the other factors the better. Notice
that in the video above when I took the trade Heiken ashi had BEEN blue for some time and that is one of the reasons I said it was a harder place to trade. Earlier is better when there is mostly confluence ( agreement ) with the other stuff I am going to mention next. Heiken ashi should be trading below Slope direction NOT flat angled or close crossing it back and forth ( You want to strike when the iron is hot not just warm )
 
2. Slope direction is RED: When the slope direction is RED This needs to be above Heiken ashi and a stronger sign is if there is some distance and there is a bit of a down trend angle you can spot with your eyes ( and others can likely see as well ). So remember trade what you see not what you think you might be seeing if needed ask for someone else's opinion.
 
3. Price action on the chart: Price should be trading in a down trend and there are 2 ways to trade this price action.
A) Wait for a pullback with a green candle digging into the heiken ashi but take note in strong momentum down this might not happen and so on a 15M chart you must be prepared to wait 1 hour or more. Another thing is like I said in the video if the PULLBACK is very strong and crosses Heiken ashi it could be that the move is over or pausing at least. So this means you will need to practice and get used to trading heiken ashi like this.
 
B) Just catch the ride on momentum: If you interpret momentum as being strong meaning everything I just talked about above is in order.
  
1. Price action is below  Heiken ashi smoothed on the charts and candles have been painting red down candles.
 
2. Heiken ashi is below slope direction with some space in between and not touching slope direction.
 
3. Slope direction is RED and angled down along with price and heiken ashi.
 
SUPPLEMENT indicators:
 
4. RSI: When RSI is trading below that bottom line then the trend going up is stronger if it is in between the 2 lines then the trend is probably better interpreted as neutral and no mans land.
 
5. BOT Round numbers: When we are close to a line for a round or whole number that price has stopped at recently before, be careful. This may mean that traders on the futures or Forex market are protecting that number and even with momentum, price might stop there in some cases. Also another more important place in our opinion is when we are near the BLUE line on the chart because that is the average swing DOWN of the day and you might not have as long a ride left on momentum DOWN at that point in the trading day. So if you are trading spot FX or a spread on Nadex most of the ride MIGHT be over. Also if you are trading EUROPEAN style binary options the market may reverse or at least get choppy around this BLUE line from the round numbers indicator and that can equal a nail biter trade at best.
 
      To quote that great intellectual Porky The Pig that's all folks. This is the basis of how we trade using the Heiken Ashi indicator or Heiken ashi smoothed to be more exact. Premium members have access to a modified version of the indicator that I have in the download below and it is tweaked and adds some more analytics to help you trade even better informed so we encourage you to join our site as a paid member. Joining as a paid member helps support our website and offers even more valuable information and custom indicators and strategies along with real-time signals. Be sure to join the conversation about this strategy on our forum click here.
 
Installation: Under MT4 you will need to place the contents of the indicators folder inside your indicators folder and the contents of the template folder inside your templates folder and then restart MT4.
NOTE: We suggest a chart timeframe of 15M or greater using this template. Spot Forex a good stop is below / above the slope direction at time of entry TP is a recent S/R area.

 

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