The Heiken Ashi Smoothed Indicator was developed by a Japanese trader named Goichi Hosoda in the early 1970s. He published his work in a book called “Ichimoku Kinko Hyo” which introduced the Heiken Ashi chart as one of the ways to analyze and trade the markets.
What is the Heiken Ashi Smoothed Indicator?
Heiken Ashi Smoothed Indicator is a trading strategy that is based on the Heiken Ashi candlestick chart. This strategy aims to filter out market noise and provide a clearer picture of the trend direction.
The Heiken smoothed strategy has become popular among traders due to its versatility. It can be applied to any type of chart without any limitations. The indicator is known for providing accurate calculations and minimizing errors. It also serves as a tool for detecting errors. This strategy is mainly used for analyzing market trends and providing a technical perspective.
The Heiken Ashi Smoothed Indicator is widely used because it can be applied to any chart without any limitations. It is known for providing accurate results and detecting errors. Additionally, it is used for analyzing and understanding market trends from a technical perspective.
Key Features of the Heiken Ashi Smoothed Indicator
- Uses a moving average to smooth out the price action on the chart.
- Identifies the direction of the trend by the color of the candlestick.
- Provides a clear signal to enter or exit a trade by the formation of bullish or bearish patterns.
Heiken Ashi Smoothed Strategy
Buy Signal
- The Heiken Ashi Strategy indicates a buy signal when the signals move upward. This indicates a strong change in the trend and the potential for profit. When the price rises and the buy signal appears, it’s an indication that the trend is bullish.
Sell Signal
- The Heiken Ashi Strategy signals a selling opportunity when there is a downward movement in the signals. This change towards a bearish trend suggests potential losses. When the sell signal appears, it is a sign that the trend is losing its strength. The price decrease confirms this bearish trend.
Heiken Ashi Smoothed Indicator Pros & Cons
Pros
- Helps to filter out market noise and provide a clearer picture of the trend direction.
- Identifies the direction of the trend by the color of the candlestick and the color of the indicator.
- Provides a clear signal to enter or exit a trade by the formation of bullish or bearish patterns.
Cons
- It can be prone to whipsaws, which can result in false signals.
- It may not perform well during ranging market conditions.
- It requires a higher time frame to be used effectively.
Conclusion
The Heiken Ashi Smoothed Indicator is a trading strategy that combines the Heiken Ashi candlestick chart with a moving average to filter out market noise and clearly indicate trend direction. It is known for its versatility, accuracy, and ability to detect errors, and traders often use it to identify bullish or bearish patterns and make trading decisions.
Self-confessed Forex Geek spending my days researching and testing everything forex related. I have many years of experience in the forex industry having reviewed thousands of forex robots, brokers, strategies, courses and more. I share my knowledge with you for free to help you learn more about the crazy world of forex trading! Read more about me.
