Heikin-Ashi Trading Strategy - Crypto Academy /S4W2 - Homework Post for Professor @reddileep
HELLO EVERYONE, HOPE WE ARE ALWAYS HEALTHY. This is season 4, and week 2, and prof @reddileep's lesson on Heikin-Ashi Trading Strategy was very useful. and I will take this class.
The Define of Heikin-Ashi
Heikin-Ashi, for all traders of course this technique is not a foreign thing. Heikin-Ashi is also commonly known as heiken-Ashi, in Japanese hEIKIN has an average meaning. In use, the heikin-ashi technique is used in conjunction with candlestick charts, The purpose of this collaboration between the two is to see market trends, and in order to be able to predict the price of coins in the future.
The heikin-ashi technique itself is often seen by traders as a very accurate technique. In fact, the heikin-ahi technique has similarities to candlestick charts, this is because the heikin-ashi technique is the result of the development of the canclestick chart technique. The shape between the two is almost similar.
But there are a few things that make it different, This difference is based on the founder of the Heikin Ashi technique following certain formulas and algorithms, so the heikin ashi technique will look different from the candlestick. In the heikin-ashi technique also consists of open, close, low, and hight. However, the calculation element in this technique is very complex or perfect. Based on the optimal candlestick, the heikin-ashi technical indicator will visually soften fluctuations in the market, and also makes it easier to analyze. This is why many traders believe that the heikin-ashi technique is very accurate, because the results of the analysis can show the best time to be active in the market.
The advantages and disadvantages of the heiki-ashi technique.
Excess
The heikin-ashi technique will give traders an attractive appearance. This technique will change the appearance of an ordinary cnalde to be more pleasing to the eye. Besides pleasing to the eye, this technique can also clearly display the strength of the trend in the market. In addition, the heiken-ashi chart can also integrate with all available technical analysis systems.
Deficiency.
The heikin-ashi indicator has a little lack of signal, this technique has a delay of the signal. However, this is not a serious problem. Because, this shortcoming can be a valuable thing for traders who use the heikin-ashi technique. The weakness of the signal given by this indicator can reduce the number of false signals, so that it will have an impact on preventing wrong open.
Difference between heikin-Ashi and Candlestick
| HEIKIN-ASHI | CANDLESTICK |
|---|---|
| Heikinn ashi is more of an indicator that moves and displays the trend in a certain period | Describing the condition of market movements, this causes it to move dynamically in accordance with the laws of supply and demand that are taking place in the market |
| Gives a smoother look to traders, there is a tendency in heikin ashi for each candle to remain white during a downtrend, and will turn green when an uptrend | In ordinary candlesticks, bars will display different colors even when there is a trend in the market |
| Heikin-ashi wears the average of the prices, the price on the candle at that time may not be the same as the price in the market that is being traded In other words, if the bar has not been closed the current price displayed on heikin-ashi is not the actual price. | The price indication displayed on the candle stick is the current price of the currency pair, and the price is the same as the closing price of the candlestick (or the current price if the bar has not closed) |
screenshot of candlestics from trading view
screenshot of heikin-ashi chart from tradingview
The Heikin-Ashi technique has several characteristics in common with standard candlestick charts, but the heikin ashi technique uses a modified close-open-high-low (COHL) formula, This means that this technique has a different formula with candlesticks:
Open Heiken-ashi =
Open previous Heiken-ashi candle + close previous Heiken-ashi candle) / 2
its meaning that the price at the opening of the bar will be calculated by the total sum at the time of the previous bar opening. then the result we will divide by 2. thus the opening of the candle is right in the middle of the previous candle.
Close Heiken-ashi.
Current price from open + current close + current highest + current lowest price / 4
The formula for closes heikin-ashi is to add up or add the open, close, high and low that occurred at this time, or now. The result of the sum of these 4 things, then we divide by 4.
High heiken-ashi
MAX (HIGHT, OPEN, CLOSE) of Current candle
This section is the maximum value between high, open, or close that has a match with the heiken-ashi candle in a certain period.
Low heiken-ashi
Min (LOW, OPEN, CLOSE) of current candle
For low heiken-ashi, it is the minimum value between low, open, and also close that corresponds to the heiken-ashi candle in a certain period.
In seeing our opportunities to buy through the heikin-ashi technique, what we need to understand first is to look for locations where market movements are full of indecision.
Or the market moves erratically or erratically. Next, we have to look at the location of the bullish candle, if the bullish candle follows the erratic movement earlier, then this is a buy signal for us.
screenshoot from tradingview.
A strong bullish candle appears he appears after a wavering candle, then the uptrend follows as seen from the graphic . it is seen by traders as a point after a strong bullish candle as a buying opportunity
My answer is "Yes",
It is possible to trade with the signals received from the heiken-Ashi technique. However, Trading in this phase is highly discouraged. Because, in my opinion this is too risky and also the possibility for it might be very small.
However, back again to my answer is "yes" or it POSSIBLE to make a trade, this is because all indicators are recommended to be paired with other indicators, including this heikin-ashi technique. By combining heikin-ashi with other indicators, it will help traders make good decisions.
One example of merging or when heikin-ashi is paired with other indicators such as RSI, MOVEMENT AVERAGE INDICATOR, as well as the KDJ indicator, will help traders make wise decisions in trading. In addition, the installation of the heikin-ashi with the 55 EMA AND 21 EMA will have an effect on increasing the signal.
Heikin-ashi which actually gives a good trading signal, so when paired with the indicator I mentioned earlier, then heikin-ashi will help the trading process to filter out fake signals.
Buy orders are placed on the trading view demo account. I gave an example of buying BITTREX:BTCUSD
Like I said before After the indecisive candle, the next candle is a strong bearing candle, but the 55-EMA line and the 21-EMA line are moving below the price, signaling a bullish move. This was the case where from Heikin-Ashi who gave the false signal, but the right call was made with the signal I got from the EMA pair.
screenshot from tradingview
SALE TRADE ETH/U.S. DOLLAR
SCREENSHOOT FROM TRADINGVIEW
screenshoot from tradingview.
I use a demo account to sell ETH/U.S. DOLLAR a sale is made when a bearish candle replaces an uncertain candle. PROFIT LOOK AS IN THE PICTURE.
The Heikin-Ashi technique is built as an alternative to traditional candles, the use of this technique will make it easier to identify,
predict the direction and strength of the trend in the market to traders. The heikin-ashi technique is a technique that uses the average price to create candles and reduce noise. Combining the heikin-ashi technique with a variety of other indicators such as MA, EMA will make the direction of trading signals more accurate. More than that, this technique can also provide much better trading signals, over a long period of time.
In use, this technique of course does not necessarily guarantee a success. Every trader is required to deepen their knowledge, and also the direction of the market must also remain stable so that success can be achieved.