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Today in this article I am going to teach you one of the most famous and important concepts i.e Heiken Ashi Candlestick.
What is Heiken Ashi Candlestick?
In Japan Heiken means “average” and Ashi means ” pace”.
This candle was developed in Japan by a common rice trader Munehisa Homma. when he found a link between the price and demand for the rice.
Heiken Ashi is just like the brother of the Japanese Candlestick that filters the standard candlestick and makes it very simple and easy to analyse the market.
The Heiken Ashi uses the open – high data from the prior period and open – high data from the current period. because of which it eliminates the basic market noise and makes the candles much smoother than the standard candlestick.
How to read Heiken Ashi Candlestick?
Here, to illustrate Heiken Ashi Candlestick I am going to IQ Option.
If you don’t have an IQ Option account. click here.
You can sign up via the form given below.
Once you click the link you will land on IQ Option Homepage.
Now, enter your email, password & hit sign up.
Once you have signed up, you will land on the IQ Option dashboard.
Now, click on the chart button.
Secondly, select Heiken Ashi from the menu.
Lastly, click on the indicator button.
Now, click popular and select RSI from the menu.
Keep, the settings default
That’s it!!! the basic setup is over now, your dashboard will look something like the one given below.
Now, talking about How to read Heiken Ashi Candlestick? well, it’s damn very easy.
The golden rule of Heiken Ashi Candlestick says:
If we see two consecutive green or bullish candle then it signals a bullish trend.
Similarly, If we see two consecutive red or bearish candle then it signals a bearish trend.
Note: Heiken Ashi golden rule works best on the High time frame chart.
Let’s see some examples.
Given above is a one hour chart, and we can clearly see that the golden rule has worked most of the times.
The moment we see two consecutive red or bearish candles, then we see a pure bearish trend and similarly, the moment when we see two consecutive green or bullish candle, we see a pure bullish trend.
Heiken Ashi Strategy: How to win big?
The strategy I am going to teach you is called Heiken Ashi RSI Strategy.
This Heiken Ashi Strategy is really powerful and can give you big results.
The Golden rule of the Heiken Ashi Strategy RSI says:
If we see a continuous two green or bullish candle in Heiken Ashi plus if the RSI shows you an oversold level then we should go for BUY trade.
Similarly, If we see a continuous two red or bearish candle in Heiken Ashi plus if the RSI shows you an overbought level then we should go for a SELL trade.
Let’s check some examples.
Given above is the 1 hour chart and as you can see above that there are two consecutive blue candles plus the RSI shows the oversold level and later we see a huge hike in the price.
So, here can take bulk BUY trade and make a big profit.
Similarly, here we see two consecutive red candles plus the RSI shows the oversold level, so we can take SELL trade here.
So, this is the end of this article I hope you have found this article really helpful.
So, as you can see the Heiken Ashi is really very easy to read plus can give you a long term profit.
Just remember to trade in a high frame chart like 1 hour 2 hours. and follow the golden rule of the Heiken Ashi RSI Strategy.
Thank you. and wish you all the best 🙂
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