Heikin Ashi candlestick is a good alternative to normal candlestick. It is widely used by forex traders as it reduces noise and gives accurate information about market direction. We can also use it in stock market and earn good return. So lets see How to Trade Using Heikin Ashi Candlestick Pattern.
Calculation of Heikin Ashi candles are different from normal candlesticks so they gives more accurate information of market trends. These candles reduces noise when used with higher timeframe. Higher timeframes i.e. 1Hr, 1D produces more accurate signals than lower timeframe.
You will get good result with Heikin Ashi candles if you use it with Pivot Points and MACD.
When to take Entry ?
When 3 Consecutive bullish candles without any tail at bottom are formed then you can initiate long Position. Confirm it with MACD. MACD should be above Zero line.
Check the Buy Signal in below chart. Remember you have to take long position only if bullish candles has no tail at the bottom.
When to Exit Trade ?
When 3 consecutive bearish candles are formed without any tail at the upper part and MACD is below Zero line.
Check the sell signal in below Chart.
When to stay out of Market ?
It’s very important to know when to stay out market. Heikin Ashi candles will help you to decide it. So when there are continuous Doji or Spinning top candles are forming then you should stay out of market as market is unable to decide the trend. This will save you from taking position against the trend.
Check below Chart for to know when to stay out of market. Blue box shows Doji candles. Doji candles signifies market is lacking direction and that’s why market remains in range bound condition.
Hope you have enjoyed article on How To Trade Using Heikin Ashi Candlestick Pattern.
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