[0:00]Hey what's up guys? It's Ezekiel here. Let me hit you with this. Most traders lose, not because their strategy is bad, but because their charts are lying to them. So the market throws like fake signals, right? Whipsaws and false breakouts. And then you get stop up again and again. So what if you could flip the script and make the chart finally tell you the truth. So today I'm revealing a Heiken Ashi trading strategy that works like a charm. This is where you can cut out the noises, locking you on the real trend and helping you catch the big moves with way less stress. Once you see how simple this is, you'll never want to trade without it again. Let's dive in. So, first off, what is Heiken Ashi? In Japanese, it means average bar. Here's the thing. It doesn't mean much until you actually see this in action. So instead of showing price changes like a normal candlestick out there, the Heiken Ashi smooth everything else. So what this does is that it averages the price to filter all that crazy noise, all that wigs, etc. The Heiken Ashi candle close is calculated by adding the open, the high, the low, and the close of that current candle and then divided it by four. All right, so I'm giving you like the back foundation of how this works. If you do not know exactly why or how it is meant to be calculated, it's just so that you have a good idea behind it. All right, so now, once the candle open, is calculated as the midpoint of the previous candle open and close. So then using these two averaging techniques, it creates a clearer and smoother view of in a way price action. Right? So now let's look at this chart with the Heiken Ashi candles. All right. So here's the thing, when you are trading on most of the platforms out there, you once you add in the Heiken Ashi indicator, right, the candle indicator, you it will switch the chart from the normal bars that you're seeing right now, the candle bars, into this Heiken Ashi bars itself. And this is what and how it's going to work, all right? So now, once you switch through these bars, you you are going to notice what? You're going to notice how price action, it appears smoother, clearer, right? And the main usage of this is to make you identify trends easier. Right? It becomes easier to spot trends, right? So during an uptrend, we would mostly see the green candles, right? Off this, of these Heiken Ashi candles. And then same thing, during a downtrend, you'll mostly see the red candles, right? So knowing what the Heiken Ashi is is just the first step. Right? The real question is how do we actually read them and then eventually use them to make good trades. Quick pause. If you found this video helpful so far, here's something that always surprises me. 73% of you who watches this video regularly haven't subscribed yet. I mean, if you're getting value and want to support what we are doing, the best way is just to hit that subscribe button. It's free and it really helps us to continue creating better content for you every single week. It truly means a whole lot to us. Okay, now, so now let's get back to it.
[3:39]It's actually pretty simple. So basically, when we break down the candles of the Heiken Ashi, there are just three types of candles. The bullish ones, right? So the bullish Heiken Ashi candle is here's how it looks like. It's a green solid body with an upper wick. So it may have a small or entirely no lower wick, right? So this indicates what an uptrend. The main thing, bullish candle, big green body, upper wick. The one at the bottom, the wick at the bottom is either nothing at all or very small, all right? So this is what a bullish Heiken Ashi candle looks like, all right? So this indicates what uptrend. So, next, bearish candle. So bearish candle is just the opposite, right? With a longer lower wick. It may or may not have an upper wick. So this signals a what? A downtrend. Then the third one is the doji. So doji, the doji can be green or can be red with a small body and long wicks on both sides. So this means what? This means that the trend is now slowing down. Right? The market is pausing before deciding on the next move. All right, so now you got the foundation of the three types of candles, right? So we are going to use this to help you to identify the five key signals of the Heiken Ashi charts. Ready?
[5:06]Number one, a strong uptrend. All right, so in a strong uptrend, you are going to see a series of the green candles, which is what we talk about earlier, right? With no lower wick, right? So this means what? It's only all the upper upper wicks, right? So this means strong bullish candles, right? This means what? The buyers are in control. Right? So, plus, plus, if the candles keeps getting bigger, it shows the trend is gaining strength. Right? This means what? Strong buying momentum. It's also means that, hey, it's a good time to enter in an uptrend in the direction. I'm not telling you, oh, you see this, you enter right now. I'm telling you, which we will cover later on how to enter, I'm telling you that this indicates that the trend, the momentum is strong. So if you are looking to sell right now, ah-ah, don't do that. Because that is now having a strong buying momentum. Now, next. So when the uptrend starts to weaken, here's the thing, the candle start to get smaller. Sometimes, they even show the lower wicks. So the candle start to get smaller and the lower wicks may start to appear. Right? This means what? The buyers are now losing strength. And this also means what? That the trend may pause, the trend may retrace or the trend may entirely reverse. So during this time, let's say you have already bought, this may be a time whereby, okay, that you can note that, hey, the trend may be changing, the trend may be reversing or the trend may be pausing. Right? I'm not telling you to get out right now, but if you are intending to get in right now for a buy, that's not a good time, all right? You probably want to wait for the retracement first or further confirmation before it breaks up the next wave again. The third one, sideways trend. After an uptrend, when is it uptrend or the downtrend, you you might see a series of doji candles, right? Which is what we talk about, right? The doji candle. So a single doji, one doji, can mean what? Uh momentum loss, but when you see multiple doji candles, it means what? The price is moving sideways with no clear direction. So you want to wait, right? You want to wait it out. It's just it's just undecided at that moment in time, preparing for either direction, actually. Now, the fourth one, a strong downtrend. A strong downtrend is just the opposite of a strong uptrend. So this is easy to spot because you have a series of red candles, no upper wicks, only lower wicks, candle bodies get bigger, strong downtrend. This is where you want to, mm, it's time, if it fits your strategy, you want to get in on a selling trade and not a buying trade, because the selling momentum now is strong. All right, and then the fifth one, the weak downtrend. Right? The weak downtrend is where the the candle start to get what? Smaller. And it may even show upper wicks. Because the usually the the bearish candle should be lower wicks, right? But now it starts to show upper wicks itself. This shows what? The sellers are losing momentum. It means the trend may pause or even reverse. So if you're thinking to sell right now, ah-ah, now it's not a good time to sell, because you're not selling with momentum. All right. So now you you're getting the hang of it, right? Now you're getting the flow. I'm going to start to put all of them together, but here's the thing, you know? Most traders they don't realize that they don't, they don't use the Heiken Ashi in a way the right way. There are actually two types of Heiken Ashi candles, the classic and the smooth. So most traders, they only use the classic version, but we don't, right? So now, let's take a look at the classic Heiken Ashi. So this is the candlestick technique, right? That smooths out the price movement, right? Which is what we talked about earlier, right? For a clearer view of the trend. Now, if you take a look at this example, right, on a traditional candlestick chart, you will notice a lot of market noise during an upwards movement. So this noise can create confusion. It can create false signals for the buyer like, oh, maybe, maybe it's not going up anymore, maybe it's going to go down, that kind of thing. But if you switch to the Heiken Ashi chart, you see that it smooths out the market noise by displaying consecutive the same colored candles when the market is trending. So this allows traders to easily identify and follow the overall trend with better clarity. But like any other technical indicators, the Heiken Ashi has its drawbacks.
[9:40]One of the biggest limitations, which is why you don't see a lot of people using Heiken Ashi is that it doesn't show the actual market price like a traditional candlestick chart. It shows the smooth version, right? But that would in a way restrict our ability to have a proper read on the chart itself. It makes us harder to to spot chart patterns for example, or to to find key support and resistance level, right? Because the Heiken Ashi doesn't actually show you the actual market price itself. So that itself would make us not want to switch to the Heiken Ashi chart. And which is why the normal candlestick chart is actually more popular instead. Right? Now, to address this issue, a new indicator was created. It's called the smooth Heiken Ashi, right? So the smooth Heiken Ashi, it now overlays the actual chart, the candlestick chart, instead of replacing it, so it is an add-ons. We are still having the normal candlestick chart, but it now adds the Heiken Ashi, all right? This allow us to see both the actual price and the smooth trend itself. Now, now, now, this is going to be useful, isn't it? Because you now can look at the trend while still seeing the real candlestick charts itself. All right. So, meaning to say that we are still going to trade the same way, but now the Heiken Ashi is not an added indicator, all right? So this helps us, what? This helps us to spot trends more clearly. So while keeping all the important price details are visible, like what we talked about. So for example, if you take a look at this, it enhance our trend visibility, right? Plus, it does a good job into filtering out all the noises, right? Especially in volatile markets like this, whereby you're going to see all these dips, potential dips, right? Dips below, etc., right? All these dips below may may may allow people to think, oh, the trend may change, so and so forth. But the Heiken Ashi can overall tell you that, hey, we are still in an uptrend. Don't get fake out by all these whipsaws, by all these false breakouts. Right? It's helpful, right? It's helpful. As you can see, the smooth Heiken Ashi, it remains largely unaffected by all these short-term market fluctuations, right? So this gives you a reliable buying trend signal. The green candle shows what? The green candle shows that the price is moving in an uptrend, right? Now, the red candle signals a downtrend. So we have already covered all this. So now, by using this, we can use the colored candles to spot potential trend reversals. So, for example, let's take a look at this. If the indicator change from green to red, so it signals a possible shift from an uptrend to a downtrend or vice versa. So, then we add on, right, our knowledge of the size of the candles. Remember the bullish candles, the size of candles will help you to identify how strong the trend is. Right? If the candles gets bigger, it means the trend is getting stronger with more momentum. If the candles gets smaller, it means the trend is losing strength, correct? These candles will help us to also spot potential trend reversals. So, for example, if look at this, we identified the trend reversal from a downtrend to an uptrend. By at a point when the Heiken Ashi shifted from the red to the green candle. Now, before the color change, the candles, the red candles, were actually getting smaller. So this shows that the downtrend is weakening, right? Before the uptrend started, okay, now, here's how to put it together. As we know, as as you now know, right? This shift of red to green candles, right, is based on the trend direction. Now, you got to understand, this is not a direct a buy or sell signal, the moment it changed color. Meaning to say that you cannot just enter a buy trade just because the candle go from red to green, right? And you and you shouldn't go for a sell trade just because the the the the the candle go and change color and change to red from green to red. So, no, no, no, no. This is not how you are supposed to to do this, because why? When you do it like this, it will lead to a lot of late entries, right? Late entries and you're going to miss out a lot of opportunities. If you take a look at this example, if you take look at this chart, you see what? The market is in a strong downtrend. And also by these larger red Heiken Ashi candles, right? So this confirms what? Okay, strong bearish momentum. Then you notice that the Heiken Ashi starts to get smaller, right? It starts to get smaller. Right? It signals about a potential slow down, it means slow down in the downtrend. Now, it finally turns green. This is the point where it suggests what? A potential reversal from a downtrend to an uptrend. But if you take a look at this, the color change only occurs after price has already made a a pretty big move upwards. So if you enter a buy position at that point, it's kind of too late. We have missed the whole chunk over there. So, now, I'm going to show you the four-step strategy on how can you use the smooth Heiken Ashi indicator. Step one. You got to find a strong clear trend. So for example, right here, right? You can see that the price is moving down. The indicator is showing large red candles, this tells us that it's a strong downtrend, all right? So now, one thing's we have identified the trend, the next step is to look for that change in trend. So then we do this by waiting for the Heiken Ashi candles to start showing us signs that the trend is about to reverse. So we see that the candle start to get smaller, right? And then it finally switch to green. So this signals that our trend has changed. So this is step two, but we don't want to buy here just yet, right? Because like, like what we talked about, a late entry is it's already a late entry because price has already went up. Right? It's already went up. So then what do we do? Instead, we wait for price to pull back towards the indicator itself, and that is step three. So this means what? We are actually using the indicator as support and resistance level. So, then, for step four, we wait for once it comes down to our indicator, right? We wait for a confirmation signal, right? We do this because we want to be really sure that the trend will continue to move upwards and not like suddenly just reverse and go back down itself. So what are we looking for? We are looking for price to to show us that, okay, it's now ready to move upwards in this specific area. All right. So, now, if you take a look at this, what do we see? There is a what? There is a red candle with a long wick pointing downwards. Okay, so this is important, why? It shows us that even price track to go like downwards, right? To the lower. The buyers step right in and then push the price back upwards. So this is a signal that there's a clear rejection from the downside, meaning to say that the sellers cannot hold their ground over there. And then right after this rejection candle, we see a green engulfing candle that formed. So this is a strong sign as an extra confirmation of this upward momentum. What red candle? It's good, but it's not good enough. One pin bar is good, but not good enough. Plus this green engulfing candle, it gives us a strong sign of an upward momentum. Gives us extra confirmation that the price is now likely to continue to move and push its way upwards, all right? So, now, now that you got our strong confirmation signal, that's where we can enter for what? For a buy position over here, all right? Then, for your stop loss, we're just going to place it below that swing low, right? Just place it slightly below, right? At the bottom of the the candle wick, right? And for our take profit, we want to aim for the next rejection level. I would prefer it to be on the same time frame itself. All right, cool. So now with this method, we are able to execute what? These are pullback trades of trend reversals with high probability. I'm not saying that we cannot trade even more, we can, right? Now you got to look at other time frame, inter time frame to decide whether you want to go more, but this method allows you to learn when the trend has changed with confirmation and precise entry points. Good, all right? Now let's sum it up.
[18:34]To master the Heiken Ashi, we we we covered the three points, right? We use the Heiken Ashi to smooth out the market noise, right? So that's where you you make the trend clearer and easier to follow. The three methods of candles, which is what we talked about, the green candles, the bullish one shows an uptrend. And then we got the red candles that shows the downtrend, right? And the doji indicates indecision, right, and potential trend changes, right? We also covered the five signals, right, of the different types of trend, right? The strong uptrend and the strong downtrend and the weak downtrend and weak uptrend and the sideways trend, correct? And then we talk about the classic and the smooth Heiken Ashi. And then we said that the smooth Heiken Ashi is actually more reliable, right? Because we can still use our normal candlestick chart itself. Right? Then we also talk about, we do not want to solely rely on color change. A lot of traders do that, oh, the color has changed, it's now in uptrend, I need to get in right now. No, no, no, it's going to be always be late entry, and that's where we use our four-step method to enter with pullback and confirmation itself. So, thank you so much for watching. If you enjoyed this video, please give it a thumbs up, right? It really helps to keep the channel growing and if you're new here, don't forget to hit that subscribe button and turn on the notification bell so that you never miss an upload. So we also love to hear from you. Right? Drop a comment below and let us know what you think or what you'd like to see next. I mean, your support truly means the world to us. It keeps us motivated to bring you awesome content every week. And if you're keen to learn more, I've created a free five-part comprehensive training where I show you exactly how I trade using my lifestyle method.
