Heiken Ashi candles are powerful tools for identifying and holding long-term trends in swing trading by filtering out market noise, but they are detrimental for scalping due to their averaged price representation.
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If you want to swing trade and get a long-term position in a trend
heiken, Ashi candles are very very good.
If however you are scalping, I can actually candles can be very
detrimental in this video, I'm going to explain how you can trade
heiken, Ashi candles the proper way and why you shouldn't use them
when your scalping
Welcome back to the channel, everybody.
My name's already.
And this is the moving averages, shall we discuss everything day
trading to keep you profitable on a consistent basis?
99% of my videos are based on V or requests.
So this is a highly requested video.
People want to learn how to trade heiken Ashi candles.
I'm going to do my best to explain how exactly to read these
candlesticks as well as give you a reference video that you need to
watch in order to fully understand it because if I did both of those
things in this video, it be 30 minutes long.
So let's get into the charts.
All right, so I have us30 up on the charts and I'm doing this because
us-30 is one of the most strongest, trending things that you can trade
it.
Stays consistent.
Yes.
Darling, wakes up and down but overall the consistency of us 30 and
the trend, this is literally the trend of the financial markets in the
United States.
So in comparison way less volatility to say a cryptocurrency with a
traditional bullish, Japanese can
Prices.
Open up here and clothes here.
The next candle that forms opens at the exact point that the previous
candle closed.
Most of the time, there's the rare occasion with a price jumps within
that one second.
Conversely, if you look at heikin, Ashi candles they actually overlap
each other.
There's a reason for this because of these candles aren't specific to
the exact price action at that time.
High can a she breaks down into two words, hicken and Ashi hicken is
average, and a, she is pace.
So, these candles show, the average pace of the price movement, that
is one of the primary reasons you should not use this for scalping
because when the price moves up or down, it doesn't show it concretely
on this Candlestick and you could go into a massive drawdown,
especially if you're in a short-term position.
You don't want that kind of drawdown.
When you're only trying to get a small move, however, this is one of
the most lethal.
Ways to trade with the trend to see when the trend is slowing.
And when a reversal is potentially going to happen.
So I'm going to link down below.
This is one of the greatest YouTube videos explaining everything about
heiken, Ashi candles and how they're formed and how their structured
absolutely everything.
This is one of my favorite YouTube channels as a technical analyst.
I watch these videos constantly to learn every aspect of trading,
every aspect of reading chart.
The secret mindset is one of my favorite YouTube trading channel.
So if you aren't subscribed to that channel, you definitely should be.
Anyway, I've got a link to his heikin-ashi candle video, down below.
This one, it's in the description after you're done watching this,
watch that.
So you have a full understanding of how I would place a trade and how
these candles are structured.
But essentially, you can get massive moves and really, really good
profits.
And actually hold a trade in the trend.
The entire direction of that trend from start to finish.
Okay, I've got this zoomed in as close as I can.
The thing that you want to look out for, there's three different
phases of heiken, Ashi candles that are huge body long wick candles in
the down Direction and huge body long with candles on the upper
direction.
If you notice the difference, however, when we are in a strong, strong
downtrend, there are no Wicks on the upper sides of these candles.
Only on the Lower Side, conversely on the bullish Candles, there are
no Wicks on the bottom, only on the top.
So as you guys know, when looking at Trends on normal Japanese
candlesticks, the price will go up, come down, come up, come down, and
we are in an uptrend in this scenario.
Then eventually, once we get to the top, you start seeing a break and
structure and a new downtrend form with heiken.
Ashi candles, and Trend trading.
You actually don't get too many of these.
It reduces all of this noise.
And just shows you the clear up Trent.
Now in the trend starts reversing at this point right here.
Heiken, Ashi candles actually get you a earlier entry than waiting for
structure to be broken.
I'm going to show you exactly how this happens in the candles
themselves.
So always at the bottoms and tops of Trends, you can see that these
heiken Ashi candles are much smaller with Wix on the top and the
bottom.
This do g style candle is where the trend is likely to go.
The opposite direction than two candles.
After that, we get our first heikin Ashi candle where there is
absolutely no wick on the bottom.
This candle right here is the entry point for the new trend direction,
as the trend get stronger, and goes up, these candle bodies, become
absolutely humongous.
Then once the trend starts to slow down the candle body is reduced in
size and then you start getting Wicks on the tops and the bottoms.
Then our first opposite color candle with a wick on the top and the
bottom, another do g style, candle immediately.
After that, you get your first heikin-ashi candle without a wick on
the top showing the formation of a new downtrend.
This happens every time where you get Wicks on the top and the bottom
of the heiken, Ashi candles and they are much smaller than the strong
downtrend candles or the strong uptrend candles than the moment that
you get one of these non wick candles in the opposite direction, that
is the start of the new trend.
So simply by doing that.
Looking for these small do g style candles with a wick on the top or
the bottom and waiting for this first candle to form without a wick on
the bottom, you can place a trade at the close of that candle with a
stoploss below.
That swing low and I want you guys to be going for 221 risk-to-reward
ratio with this strategy.
But what I need you guys to do, if you are doing this is to set your
trade according to
These prices and close your trading application.
Let the trade play out because like I mentioned before, this is
absolutely horrible for scalloping.
If you were to enter in on this trade at this price right here, when
this candle closed, which is at 34417 the price range within that next
candle to 34388, which is nearly a 40-point, move on US 30, which if
your scalping.
Hi lot sizes with a smaller accounts eyes.
It's going to really really hurt you.
And you're going to think that the price is going the other way.
You're going to close it early and you're going to miss that Trend.
So if you're new to heiken Ashi and you want to try this out, do it on
demo, place the trade and literally close the trading app, you don't
want to see it again.
The price moved all the way up.
You started to get smaller candles, then you get the do g style candle
with a wick on the top and the bottom, you wait for that candle to
close.
Always wait for the candle.
The clothes you sent your stop-loss just above the swing high and you
have a risk-reward ratio of 1 to 2.
This one is a little bit if you're because the candle body is a lot
bigger than I would expect with these types of doji Candlestick but
you could have still gotten in on this one.
With the first.
No Wick candle going for a two-to-one.
Risk-to-reward ratio at the close of that candle stop-loss below the
swing low and these are the three back-to-back, perfect trades.
Know what I really want you to focus on is, look at the size of this
first candle, that shift the momentum in the opposite direction.
It is substantially larger than that doji candle here and hear what I
want you to avoid is things like this.
You get your do g style candle and then these subsequent candles are
very, very small.
These are not momentum moving candles and can actually keep you in a
period of consolidation for
Write an extended.
Of time.
If you want to try this strategy, only do it on demo.
You need to get comfortable with it first.
You been reading the standard Japanese candles for a long time and now
you're completely changing it up to heiken.
Ashi candles, it's a different way of looking at Kendall.
That's why you need to watch that other video fully explaining it.
I can explain it to you too but he does it way better than I would and
he's already done it.
So why reinvent the wheel that being said using heiken?
Ashi candles is one of the strongest ways to actually hold a trade
through a trend if you just want to start out and do this one to two
risk-reward ratio, that's completely fine.
But if you have time and you sit on the charts all day and you've
marked up your support and resistance zones.
And you see these heiken, Ashi candles coming up and getting smaller
and smaller and smaller with Wix on the top.
And the bottom, you can actually hold this entire move until you see
candles like that.
Getting you a massive profits.
This was a 477.
Move with a 150 points.
Top lock, this is a great trade, 123 risk-to-reward ratio.
This one would have stayed about where it was at a 1 to 2.
And this one, you could have gotten a few more points out of a 234
points with a 91 Point.
Stop-lossed heiken, Ashi candles are very very powerful when intraday
trading as well as swing trading.
But if you are, scalping, I'm going to say this again, do not trade
heiken Ashi candles, because for scalping, the difference between what
the candle is showing and what that price is actually doing at that
exact second is huge, so you need to have those way bigger.
Stop-losses to catch the entire Trend.
Keeping your stop-loss below that swing high or swing low.
Now, do you guys think that I'm cherry-picking?
Some random examples?
Look doji candle swing, low doji, candle of Swing High Doja candle,
swing, low doji, candle swing high.
Like it's consistent time and time again.
Doji candle, swing, low doji, candle swing High.
Big fat bodies, big momentum move.
Once these candles, get smaller, momentum slows down, and the price is
probably going to go in the opposite direction.
Then you start seeing the big candles up, they get smaller doji
candle, swing down, it's literally every single time.
And I only want you guys to do this on a high time frame, nothing less
than the one hour chart.
The one hour chart is very ideal for us 30.
I've been back testing this throughout the last few hours and it's
absolutely nuts.
So, if you want to trade and set it and forget it, this is the way to
do it.
But if your scalping, don't even touch this with a 39 and a half foot
Bull.
Now, if you guys do want to learn how to scalp on traditional
Japanese, candlesticks going with the trend, or looking at
counter-trend trades, check out this video right here.
And if you guys got some value out of this video, you like the way
that I teach and you want to see more videos like this, make sure your
subscribe to the channel by clicking this button right here.
Thanks so much for watching and we'll see you in the next.
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