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🔴 EMA-Heiken Ashi | This is The Trading Strategy The Top 5% Use (and it makes trading way too EASY!) | Trader DNA | YouTubeToText
YouTube Transcript: 🔴 EMA-Heiken Ashi | This is The Trading Strategy The Top 5% Use (and it makes trading way too EASY!)
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Video Transcript
hey guys welcome back to another episode
in this video we will be going through
our haikanasi trading strategy in depth
and how we use it in combination with
price action
high kanasi candlesticks are great
because they smooth the price action
as a result much of the noise shown in
traditional japanese candlesticks
is eliminated with high kanasi charting
and it helps make the trade entry and
exit decision simpler
if you want more videos more often
please smash the like button
subscribe and turn on the notifications
bell so that you know exactly when new
content is released
the very important point before we start
everything we discuss in this video can
be used for currency trading
stock trading and crypto because price
action stays relatively consistent
across different assets
so we're going to go very in depth in
are you confused with not knowing
exactly how or when
to enter into a trade with so many
different candlestick patterns
traders can get paralyzed by over
analysis on whether a certain
candlestick is an entry or not
and have you gotten into a trade where
it was going in your favor
but you got out too early it's
frustrating to get out of a position
only to see the trade go further in the
let's face it as a trader we have many things
things
to analyze at any given time if you take
too long to decide whether it's time to
enter into a trade because of your
complicated entry rules
it might mean a missed opportunity for
you and if you exit your position too
early then it could affect your
profitability in the long run
but what if you had a simple way of
knowing exactly when to get in and out
of your trade without any complicated analysis
analysis
then you want to consider using the high
kanasi bars to time your entries and exits
exits
in this video i will share with you a
simple haikanasi strategy to simplify
your entries and exits so you will know
exactly when it's time to enter or exit
a trade
and now what is the haikanasi technique
the haikanasi technique is a japanese
candlestick based
technical trading tool that uses
candlestick charts to represent
and visualize market price data it is
used to identify market trend signals
and forecast price movements the
haikanasi method uses average price data
that helps to filter out market noise
the absence of market noise results in a
clear illustration of market trends
and direction which helps determine
potential price movements
the trading technique assists traders in
identifying when they should hold on to
a trade
pause a trade or identify if a reversal
is about to occur
the haikanasi trading technique was
developed by munich
hama in the 1700s the technique shares
some characteristics with the
traditional candlestick charts used in trading
trading
but differs in how the values for
candlesticks are computed
in japan the word heiken means average
for balance
and the wordasi means bar per foot hence
high kanasi means average bar resonating
with the trading technique
which uses the average price of the security
security
the difference between hikanasi and
traditional candlesticks
the main difference between the
traditional candlestick chart and the
high kanasi chart is that the latter
uses a modified formula based on two
period moving averages instead of open
high low and close prices hence
the technique generates a smoother chart
making it easier to spot trends and reversals
reversals
the high kanasi charts also obscure gaps
and some price data
the left chart is using traditional
candlestick bars
and the right chart it's using high
kanasi bars
you can see that with the high canassi
bars it's much more smoother
this is why some traders prefer to use
the haikanasi candles since it reduces
the noise on the chart
and allows them to analyze trends more clearly
clearly
what makes haikanasi different from a
traditional japanese candlestick
chart is how the price is displayed in
terms of the open and the close
if you look closely at the heiken aussie
chart you'll notice that each of the
haikanasi candlesticks start from the
middle of the candlestick before it and
not from the level
where the previous candlestick had
closed high kanasi candlesticks act this
if you're interested here's the
calculation high kanasi close equals
average of open
high low and close
high can i see open equals midpoint of
previous high kanasi bar
high kanasi high equals highest of high
close and open
high can i see low equals lowest of low
by the way please don't bother to
memorize this formula
and don't even think about trying to
understand why it's calculated this way
it will not help you be more profitable
or help you become profitable at all
just understand that it's meant to help
you identify trends better in the market
also don't mistake the haikanasi bars as
a trading system because it's not
if you go long whenever you see a
bullish bar or go short whenever you see
a bearish bar
then you will go broke very quickly like
the candlestick bars
it's just giving you information on the market
haikanasi price action patterns with
candlestick bars
you have many different types of price
action patterns
you have the doji gravestone doji and
the dragonfly doji
you have the pin bars you have the
engulfing candlesticks
and the list goes on and on there are
literally tons and tons of candlestick patterns
patterns
but with the high kanasi bars i've
categorized them to just three main
types of price action patterns
first bullish bars with the bullish high
kanasi bars
you will notice that there's only a wick
at the top of the bar but there's no
wick at the bottom
as long as this is an up bar with no
wick at the bottom we consider this a
second bearish heikenosi bars
the bearish hikanasi bars are simply the
opposite of bullish high kanasi bars
they have a wick at the bottom but not
wick at the top
as long as this is a down bar with no
wick at the top
third indecision heiko nasi bars to
simplify the haikanasi bars i've
categorized all bars
that have wicks at the top and bottom of
the bars as an indecision hike in aussie bar
bar
so regardless of whether the bar color
is bullish or bearish
as long as there are wicks on both sides
we will consider this an indecision high
why use high kanasi bars now that you
know what are high kanasi bars and you
know the three different types of
haikanasi price action patterns
the question you might be asking right
now is why use the high kanasi bars for
our trading
and the answer is because it helps make
the trade entry and exit decision simpler
simpler
and now how to enter into a trade using
high kanasi bars
while it might be tempting to go long
whenever you see a bullish hike in
aussie bar
or go short whenever you see a bearish
high kanasi bar
please resist your urge to do so
i know there are people out there
teaching to do this but i know you're
smarter than that
so don't do it to have an edge trading
the markets you need to have certain
criteria to be met before entering into
a trade
buying rules or long position criteria
number one
the higher time frame must be in an
uptrend what this means is that the high
time frame has to be making higher highs
and higher lows
if you're trading the one hour chart
then the higher time frame would be the
four-hour chart
and if you're trading the hour chart
then the higher time frame would be the
daily chart
i don't like to trade any time frame
lower than the one hour chart
because not only is it tiring to watch
but the commissions and spread will eat
away a significant amount of your edge
at lower time frames
but that is not to say that it's not
profitable trading lower time frames
it's just more difficult because your
spread and commission would be a bigger
percentage of your trade parameters than
in the higher time frames
criteria number two the 10 exponential
moving average is above the 30
exponential moving average
i use the 10 email and 30 ema to
determine the momentum of the trend
criteria number three the time frame
you're trading on must have both
criteria one and two as well
once there are these three criteria in
place i will look to go long
when the price bounces off either of the
exponential moving averages
and the first bullish high kanasi is
formed at a higher low like this
then place stop loss below the low of
criteria for a short trade now that we
know the criteria for a long
trade the criteria to get into a short
criteria number one the higher time
frame must be in a downtrend
this is denoted by price forming lower
criteria number two the 10 exponential
moving average is below the 30
exponential moving average
this is straightforward and you should
have no difficulties identifying this on
your chart by now
criteria number three the time frame
you're trading on must have both
criteria one and two as well
once you have all three criteria i will
look to go short
when price bounces off either of the
exponential moving averages
and the first bearish high kanasi is
how to exit a trade using high kanasi bars
bars
as for exit because this is a trend
trading play we want to exit only once
the price has formed an opposite hike in
aussie bar
so for long trades we only want to exit
when a bearish high kanasi bar is formed
and for short trades we only want to
exit when a bullish high kanasi bar is formed
formed
as you can tell it becomes so much
simpler to determine when to exit
now sometimes if you are in a long trade
you will get faked out of your position
because a bearish high kanasi bar only
to see the next bar become a bullish
hike in aussie bar
or vice versa if you're in a short trade
but that's fine
there's no way you're going to catch
every single bit of every trend there is
ultimately if you are profitable from
your trades as a whole over a series of trades
trades
trading examples all right
enough theory here's a trade example to
show you exactly how to enter an exit
into a short trade
in this chart you can see that the
market formed a lower high
and bounced off the 30 exponential
moving average
once you see that happen the next step
is to wait for a bearish high kanasi bar
to form
when it's formed go short at the close
of the bar
from there the market dropped pretty
quickly and indecision heiken asi bars
started to form
this is not a good reason to get out
because it could just be consolidating
before the price goes down again
however in this case the price did not
go down further
instead a bullish hikanasi bar was
formed and that means to get out of the
trade at the close of the bar
here's a trade example of how to get
into a long trade
in this chart you can see on the left
hand side that the price has spiked up
pretty quickly
and then started consolidating
consolidation in an uptrend is a good
sign because this could mean that price
can go up further
and the market did bounce off the 10
exponential moving average
and formed the first bullish hykenasi
bar go long at the close of the bar
price did go up further before an
indecision high kanasi bar is formed
immediately after the first indecision
high canassi bar is formed
the next bar after that is a bearish
haikanasi bar
that's the signal to exit out of the
trade and fortunately for us
price did eventually go much lower after
we exited the trade
however not all trades are going to be
like this
as i've said this a number of times
already it doesn't matter
if you do not catch the whole movement
of the trend it's impossible to do so
what you can only do is take whatever
you can based on your trading
system and in the long run that will
lead you to profitability
here are other examples of haikanasi
trading strategy [Music]
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high kanasi bars are great because they
smooth the price action
as a result much of the noise shown in
traditional japanese candlesticks
is eliminated with high kanasi charting
and it helps make the trade entry and
exit decision simpler
as always if you learn something new or
if you want more videos more often
make sure you subscribe click the
notification bell and leave us a like to
show your support
see you next time [Music]
do you
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