A simple strategy successful trade using a candlestick chart, Hijken-ASHI
Josh McGruff, the experienced trader, founder IvoryMountain and the author of several articles on trading, shares tips on using candlestick chart, Hijken— ASHI (Heikin— Ashi, HA) and a simple but effective trading strategy. We offer to your attention translation of the article published on the website Hackernoon.
Consider the difference between a traditional candlestick charts and candlestick charts, Hijken— ASHI.
A normal candle chart
Candlestick chart Hijken— ASHI
You see the difference? Schedule Hijken— ASHI is much smoother and is clearly ascending and descending trends. Broader time intervals when using Hijken— Asha (one day or more) is useful for monitoring the overall trend of the coin. To gain access to such charts in TradingView, you need to choose the image of the candles at the top, then Heikin— Ashi.
A bullish candle with no wicks on the bottom indicate a strong buying pressure, while a bearish candle with no wick on the excess of offers for sale. Candles with wicks on both sides indicate indecision and a struggle between “bulls” and “bears.”
It should also be noted that most of the types of candles used in traditional candle charts, do not apply to Hijken— ASHI; however, doji, spinning top (rounded tip) and traditional patterns of technical analysis (wedges and triangles) are applicable to him.
So, what is it all about? For example, you can get a clearer picture of the trend for a particular coin. Hijken— ASHI seems to be a powerful tool for detecting even slight decline in activity or turning the whole trend from “bullish” to “bearish” (and Vice versa).
Of course, when you use certain technical analysis, you do so at your own risk.
Now that you have gone through a crash course in Hijken— ASHI, adding some moving averages in the chart, it is possible to form a simplified, yet effective trading strategy using the trend. For example, it may be 10— or 20— day moving average for the selected time interval in TradingView in one day.
If the 10— day moving average crosses 20— day moving average higher, then the candle will be bullish and you should buy coins as the first bearish candle should go out of trading. This is a conservative strategy, but it can save you.
If the spark will once again be “bullish” and 10— day moving average is still above the 20— day, it is possible to go back to trading. If the 10— day moving average crosses 20— day below him, there was no need to trade up until the 10 day again will cross the 20— day above.
Here is a checklist of questions, answers and actions that will help to adhere to this strategy:
1) Crosses the 10— day moving average 20— day above it? Yes. Enter the trading and continue to adhere to this checklist. No. Stop. Do not trade until that happens.
2) to see if a bearish candle? No. Wait until it happens. Yes. Exit trade and continue to adhere to this checklist.
3) Crosses the 10— day moving average 20— day below it? No. Enter the trading again with a bullish candle, go back to step 2. Yes. Trade should be considered complete. Do not enter into trading again until until the 10— day moving average again will be crossing the 20— day above it.
This checklist helps traders to follow a simple rule and removes emotion from the trading process. You will have to follow the rules regardless of how you configured. This is a fairly conservative algorithm, and you will enter into trading late and to leave early. However, by doing so you protect your capital because profit is not achieved so easily!
In addition, if you use a schedule with an interval of one day, you will have enough time to monitor trades. You will need to check your charts a couple times a day, and configure the signals so as to determine the critical points. The strategy can also be used to open long/short positions, it is possible to use other time frame. Some prefer indicators SMA or EMA instead of the usual MA (moving average). They can show different signals with points of entry/exit for the market.
However, you should always compare their strategies with historical data and conduct “paper trading” based on them before you use real assets. It should also be noted that the candlestick graph Hijken— ASHI and strategies based on it is quite popular among traders.