This trading system offers the forex chartist an easier understanding of trend direction by combining the HeikenAshi, Heiken Ashi Smoothed and the 100pips trend custom indicator.
This system is suitable for volatile pairs like GBP/JPY and the EUR/JPY due to the delay that characterizes the Heiken-Ashi candlesticks.
Chart Setup
MetaTrader 4 Indicators: HeikenAshi.ex4 (default setting), Heiken_Ashi_Smoothed.ex4 (default setting), 100pips Trend.ex4 (default setting)
Preferred Time Frame(s): 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours
Recommended Trading Sessions: Any
Currency Pairs: Great for volatile forex pairs such as the GBP/JPY and EUR/JPY
Download
Download Heiken-Ashi Candlesticks Forex Trading System
Buy Trade Example
Fig. 1.0
Strategy
Long Entry Rules
Place a buy entry when the following conditions or rules are in place:
- If the HeikenAshi candles forms a blue pattern superimposed on the candlestick, while the RoyalBlue Heiken_Ashi_Smoothed forms below the candlestick, a buy condition is in place in the market.
Usually the point in which the Heiken_Ashi_Smoothed crosses the HeikenAshi is a turning point and traders should be wary of this.
- If the 100pips Trend custom indicator forms two rows of blue upward pointing arrows, it is a signal that price is being pressured higher i.e. a bullish signal.
Stop Loss for Buy Entry: Place your stop loss below short-term support.
Exit Strategy/Take Profit for Buy Entry
Exit or take profit on position(s) if the following holds true:
- If the color of the HeikenAshi candles becomes red, it is an indication that price is going bearish, but more importantly if the Heiken_Ashi_Smoothed forms red candle like pattern above the red HeikenAshi candles, an exit or take profit is advised.
- If the 100pips Trend custom indicator changes the color of its arrows on any row to red (pointing downwards) or yellow shaped star like objects forms on any of the rows, an exit or take profit is advised.
Sell Entry Rules
Enter a sell in the market if any of the following chart patterns becomes visible:
- If the HeikenAshi candles forms a red pattern superimposed on the candlestick, while the red Heiken_Ashi_Smoothed forms above the candlestick, a sell trigger is in place.
- If the 100pips trend custom indicator forms two rows of red downward pointing arrows, it is a signal that price is being pushed lower i.e. a sell signal.
Stop Loss for Sell Entry: Place your stop loss above short-term resistance.
Exit Strategy/Take Profit for Sell Entry:
Exit or take profit on position(s) if the following rules or conditions holds:
- If the color of the HeikenAshi candles turns blue, it is an indication that price is reversing to the upside, but more importantly if the Heiken_Ashi_Smoothed forms blue candle like pattern below the blue HeikenAshi candles, an exit or take profit is advised.
- If the 100pips Trend custom indicator changes the color of its arrows on any row to blue (ususally upward facing) or yellow shaped star like objects forms on any of the rows, an exit or take profit is advised.
Sell Trade Example
Fig. 1.1
Free Download
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About The Trading Indicators
The Heiken-Ashi candlesticks offer visual interpretation of market trends in a descriptive and well-ordered manner.
These chart pattern do not show open, high, low and close, rather it computes the value of candlesticks in respect to the prevailing market forces.
This means for a prevailing bears market, the Heiken-Ashi candlesticks will show red, not minding if the price bar closes higher than it opened.
The 100pips trend indicator draws blue and red arrows in two rows within its indicator window to depict a buy or sell signal respectively.