One of the most effective way to trading with long time in Olymp Trade. Heiken Ashi Candles have some outstanding functions comparing with normal candles. That makes it become a good indicator for traders in Olymp Trade. In this article, Olymp Trade Club will help you understand about Heiken Ashi.
What is Heiken Ashi Candles?
Heiken Ashi is a special type of candlestick. It is not different from other types of candles. However, the algorithm that creates Heiken Ashi is different from others.
Here are its formulas:
Close = (Open + High + Low + Close) / 4 = The average price of the current bar.
Open = (Open of Previous Bar + Close of Previous Bar) / 2 = The midpoint of the previous bar.
High = Max of (High, Open, Close) = Highest value of the three.
Low = Min of (Low, Open, Close) = Lowest value of the three.
You may not care about a Heiken Ashi, but when the candles gather to create a Heiken Ashi candlestick chart. Which is one of the most typical chart that is used in technical analysis
If many red candles gather, it is a downtrend of the chart, which is suitable for those who place long period orders of DOWN in Olymp Trade. And vice versa, you can place an UP order if there’s a chain of green candles appears. This is the upward trend of price.
How to create a Heiken Ashi candlestick chart?
In the chart, you change the chart to Heiken Ashi chart. So you have a Heiken Ashi interface like this:
How do you think about this? When there’s a clear trend, candlesticks will appear with red or green color continuously. When there’s no trend (sideway), the red and green candles will appear alternatively.
How to Trading with Heikin Ashi Candles in Olymp Trade
You should place long-period orders if you use Heiken Ashi as indicator. In short-term, price may fluctuate but it always follows trend in long term. That’s what Heiken Ashi shows us.
There’s many way to trade using Heiken Ashi, Olymp Trade Club will introduce you some strategies:
Use only Heiken Ashi candlestick charts in Olymp Trade
This is a way that you should only use Heiken Ashi candlestick charts to analyse the price. From then, you can choose the suitable point to place orders.
For example: One minute candlestick chart. Price is stable for a long time and creates green and red Heiken Ashi candles which appear alternatively. It’s means there’s no trend in the market. Then a long Heiken Ashi candle appears and break the stability of price. At the same time, a new trend is developing. You can place orders based on the color of the candles. You can open trading order UP for 10-15 minutes.
If you want to place order for 30 minutes, or for hours, you should choose suitable time so that your options will be more likely to accurate.
Combine Heiken Ashi and other indicators in Olymp Trade
There will be some indicators that are suitable for Heiken Ashi such as Stochastic, MACD, etc. But some are not, for example: Bollinger Bands, Ichimoku, etc. You need to choose suitable indicators to combine, especially indicators that sign a new trend
For example: Stochastic and Heiken Ashi in the time frame of 1 minute.
To have high probability to win, you can observe the zone which is over 80 and under 20 of Stochastic. When 2 lines of the indicator cut each other at the zone of 80 and Heiken Ashi candles change their color from green to red, that’s when you can place a DOWN order in 5 minutes.
On the contrary, when 2 lines cut each other under the zone of 20 and Heiken Ashi candles change its color from red to green, you can place an UP order.
Wish you success!