by hugh briss
Heiken Ashi candles
100 sma close
Stochs 8,3,3, low/high
Heiken Ashi candles are "average price" candles. They are calculated using a moving average and change colour according to that average. The open, high, low and close of these candles represent slightly different things to normal candles and the best way to get a feel for them is to put them on your chart and see how they look. If you have metatrader you can go to a line chart and then set line chart to "none" in the chart properties and that gets rid of the line leaving you a nice blank screen to put your HA candles on. Notice how the candles can sometimes stay one colour for a long period of time, hundreds of pips on a 4 hour chart. Catching and holding on to these long trends can be very profitable but of course it is not always as easy as all that!
The 100 sma is there to help visualise the trend. As a basic rule of thumb if the price is above the ma the trend is up and we only want to buy and below is down and we only want to sell.
The stochastics give us information about the strength of the pullback in the trend. I find stochastics to be the best momentum based oscillator to help visualise turns in the trend and they work very well with HA candles.
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