Heiken Ashi is a type of Japanese candlestick chart. the term Heiken Ashi means ” Average Bars”. and you can find this chart easily on the Pocket Option platform. In this article, I will cover everything about Heiken Ashi and how you can trade with the same.
How to configure the Heiken Ashi chart on Pocket Option
Step 1: First of all, you need to log in to your Pocket Option account. In case, you don’t have one. click here. Step 2: Once, you have signed up click on the chart button. Step 3: Select the name Heiken Ashi from the menu.
Heiken Ashi key points
- Heiken Ashi is a modified way of displaying data on the price chart. just like the Japanese candlestick. Heiken Ashi chart has candlesticks which are built based on the formula.
- This chart was developed by Munehisa Homma in 1700. he is also the developer of Japanese candlestick. the main objective behind introducing Heiken Ashi was to reduce the limitations of the Japanese candlestick chart.
- Just like the Japanese candlestick chart. Heiken Ashi has a wick and a body. however, the last price of the Heiken Ashi candle is calculated by the average price of the current bar.
- The Heiken Ashi chart can be used with the standard candlestick chart to predict and analyze the movement of the security.
- According to experts, the Heiken Ashi chart is more reliable and accurate as it reduces and filters the market noise.
Heiken Ashi calculation
The calculation of the Heiken Ashi chart is a bit more complex than the Japanese candlestick. You don’t need to remember the formula of the chart. as the calculation job is automatically done by Pocket Option.
Open = ( Open of previous bar + Close of previous bar ) / 2
Close = ( Open + Close + High + Low of the current bar) / 4
High = The maximum value from the high, open, or close of the current period.
Low= The minimum value from the low, open, or close of the current period.
How to trade with Heiken Ashi chart on Pocket Option
Trading with the Heiken Ashi chart is very easy. You just need to remember the golden rule of the same.
The golden rule of Heiken Ashi says:-
- When we see three continuous green candles on the Heiken Ashi chart it signals an upcoming bullish trend.
- Similarly, when we see three continuous red candles on the Heiken Ashi chart it signals the upcoming bearish trend.
Now, to get the best results while trading with the Heiken Ashi chart you should always use the Heiken Ashi chart with indicators like Stochastic, RSI, and more. Today, in this article I am going to combine the same with RSI. In case, you don’t know about RSI. I will highly recommend you read this article. click here.
When you see three continuous green candles in the Heiken Ashi chart plus the RSI line is near the oversold level or line 30. It signals an upcoming bullish trend and here we can place a buy trade according to the time frame used.
Similarly, when you see three continuous red candles on the Heiken Ashi chart plus the RSI line near the overbought level. It signals an upcoming bearish trend and here we can place a sell trade.
So, this is the end of this article and I hope you have found this article helpful. I have tried my best to cover everything about Heiken Ashi chart. I will highly suggest you try this chart on the Pocket Option demo account and see how this chart works for you.