You NEED to stop using the heiken ashi RIGHT NOW!
I found an indicator that is infinitely better than the heiken ashi.
The heiken ashi, is an indicator that a lot of traders use to find the general direction
of the market. Clearing out the noise of regular candlesticks.
But what if I told you I found a secret indicator that performs WAY better than the normal heiken
ashi? Actually to be specific, I backtested this
indicator and its 2x more profitable than the normal heiken ashi.
Ope, come, come on back. There ya go. This indicator uses
I m gonna share with you what the indicator is, how to use it to its best potential, and
I m even going to share with you a profitable strategy with this indicator.
Lets get straight to it. Okay, so is your typical normal candlesticks.
Where there s a bunch of red and green everywhere and the chart is pretty hard to tell which
way the price is heading with all the noise. This is bad because it could lead to false
signals. This is a chart with the heiken ashi. It eliminates
the noise to where the candles are replaced and you can clearly see which direction the
market is heading. Making it easier to read the chart.
But this indicator isn t perfect *gasp*
One of the main issues with the heiken ashi is it doesn t provide the juicy information
normal candles sticks do. It only provides the smoothed out version of the price, not
the real price. For example:
Finding chart patterns or key areas of support or resistance.
That s until god himself made this new secret indicator.
Actually, his name is jackvmk. But you get my point it s a good indicator.
Now the reason this indicator is so good is because instead of replacing your candlesticks
it just adds a heiken ashi overlay so you can see both the price action of the candles
AND the heiken ashi all in one so you get the best of both worlds.
Another great thing about this indicator is it s way better at not providing false signals
compared to the normal heiken ashi. For example, this is a chart with the normal
heiken ashi. As you can see it provided a lot of green
candles in this uptrend but then it placed some red ones where it could easily fake you
out and make you sell early. Now this is the same exact chart with the
improved version of the heiken ashi and as you can see it only provided green candles.
So, there s no fakeouts and you would of made way more profit on this trade.
So now that we know why this indicator is good, lets add it to our chart and give you
the best possible settings for this indicator. I ll be using tradingview as my charting platform.
If you don t yet have it, ill leave a link in my description.
Go to the indciators tab and type in smoothed heiken ashi and click this one by jackvmk
Next go to the settings. Alright now the optimal settings depends on
what type of trader you are. If you re a short term trader, I would recommend
changing these two settings to 5 and 5. As this makes it better at analyzing short term
price movement. If you re more of a long term trader, change
these settings to 20 and 20. As that will make it better at finding long term trends.
For the sake of this video though, we are going to be somewhere in the middle so we
are going to keep it at default at 10 and 10.
So this how I use the indicator. Green candles signals an uptrend.
Red candles signals a downtrend. This means it s great for signaling possible
reversals. For example here, the market is in a downtrend
signaled by these red heiken ashi candles. But then all of a sudden we got a green candle.
Signaling a possible market shift. Then the market heads upwards.
But here s a secret trick you can use in order to raise the chance of you finding these perfect
revsals. You can use the size of the heiken ashi candles
as a way to identify strength. For example, here the candles start off small
and starts to slowly get larger and larger. Signaling the market is gaining momentum and
strength. Same thing with weakness.
If the candles start to get smaller. You can easily identify the market is losing momentum
and is getting ready to reverse. So as an example.
Here the chart is in a downtrend signaled by the red candles, but you can start to see
the candles are getting smaller and smaller, showing its losing the downwards momentum.
Then we get a green candle. This signals a market shift is likely to occur,
which is exactly what happens. So now you know the basics.
You know why this new indicator is better than the normal heiken ashi
And where to begin to start reading it Now it s time to get into some actual profitable
strategies using this amazing indicator.
But first.
Let s get into some of my favorite strategies with this indicator.
Now I want to make this clear. You shouldn t just enter a long trade because
the heiken ashi turns green and enter a short position just because it turns red.
This will not work in the long term. Instead, you should do this.
First you want to find a strong downtrend. Again, we can do this by finding red heiken
ashi candles and we want to see the candles getting larger and larger. Signaling this
is a strong downwards trend. The next step is finding a trend change.
We can do that, by seeing the red candles start to get smaller and then a color shift
from red to green. But you aren t going to enter yet.
Instead, we are essentially going to use the new heiken ashi candles as a support.
Wait for price to do a pullback and come back down to the heiken ashi candles.
But we still need a little more confirmation. Wait for price to show its going to respect
this area by giving a green candle.
Once we get the green candle, we can now officially enter the trade.
Set your stop loss at the low of where it the heiken ashi candles earlier.
And set you take profit to a 1.5 risk to reward ratio.
You are then going to wait for price to hit your take profit.
But we aren t don t yet. Once price hits your take profit, sell half
of your position for guaranteed profits. Then, move your stop loss to your entry.
We are then going to wait for the heiken ashi to turn red to sell the rest of our position.
Once it does. Exit the trade fully for some really nice profits.
This is a beautiful strategy. I absolutely love using it. Test it out and let me know
how it worked for you on Instagram. Next we are going to over how I made over
$70,000 in 60 days using this specific strategy. This one, is one of my favoirts I use every
day. Thanks for watching and ill see you guys next
time!