Interpreting the pricing trends correctly and deciding on a strategy in line with the current trends allow you to have a successful trade life.
A Japanese Indicator, Heiken Ashi is one of the most important Japanese indicators that allow us to see the trends while making trade decisions.
In this training, we will explain to you how to interpret this indicator.
In order to access the Heiken Ashi indicator in the MetaTrader platform, you can respectively click on ToolBar, Insert and Special Indicators.
While uploading the indicator to the platform, the increasing candles are green and the decreasing candles are red. This is to make interpretation easier. Therefore, the white-colored areas need to change to green.
After this stage, with few arrangements, the indicator will be ready to use. In the last stage, we change the graph type from the candlestick to a line chart and change the line chart color with the background color. Since the background is currently white, we change “Line Graph” as “White.”
***Important Information: So far, we talked about the details of adding the Heiken Ashi to the platform. The realization of current revisions in other financial products is a huge loss of time for traders who race against time. For that reason, to minimize the loss of time, you can save the current work in the “Template” section and use it for new financial assets without losing any time.
The Interpretation and Condition of the Market Expectation Being Positive;
For the positive expectation regarding the considered financial product to make a trade decision to be on the agenda, there needs to be two green candles consecutively in the Heiken Ashi indicator.
The Interpretation and Condition of the Market Expectation Being Negative;
For the negative expectation regarding the considered financial product to make a trade decision to be on the agenda, there needs to be two red candles consecutively in the Heiken Ashi indicator.
In the case where the Heiken Ashi indicator gives a positive signal, for this signal to be over and a negative signal to form, there need to be two consecutive red candles. One red candle that forms after the green candles is not enough for the signal to be over.
The trader who manages money adopts all characteristics of the indicator to have successful results, with the help of the indicator. However, the market sensitivity and the conditions are not always enough for the indicators to work successfully. For this reason, it is important to pay attention to the indicator signals in horizontal pricing behavior, making common decisions with more than one indicator instead of working only one indicator or using basic technical analysis methods (support/resistance and trend tendency).
After interpreting the Heiken indicator, in theory, let’s analyze the indicator’s influence in the graph in practice. The example will be given in the EURUSD parity, through a 4-hour graph.
First Signal Positive:
The EURUSD where we follow the BUY signal from the level of 1.1245 since the candles from March 11th, 2019 8 pm, and March 12th, 12 am candles create two consecutive green candle views end in a level of 1.1307 because the candles from March 14th, 2019 12 pm and 4 pm create two consecutive, red candles view. The current indicator signal is successful at this stage.
Second Signal Negative:
The EURUSD where we follow the SELL signal from the level of 1.1305 since the candles from March 26th, 2019 8 pm and 12 am candles create two consecutive red candle views end in a level of 11.1228 since the candles from March 29th, 2019 4 am and 8 am create two consecutive, green candles view. The current indicator signal is successful at this stage. The most important thing to pay attention to here is that even though the March 18th, 2019 12 am candles are green, the current signal ends because there are no two consecutive green candles. For that reason, it should be remembered that one candle is not enough.