Hello everyone welcome back to another video in this video i will teach you a very profitable
hike and ashy trading strategy to simplify your trading entries and exits so you will
know exactly when it's time to enter or exit your trade without any complicated analysis
since the hike and ashy chart is much easier than the traditional candlestick chart but before
we go any further make sure to like this video and subscribe to the channel if you didn't yet
ashi is japanese language which means average bars it is used to chart the market like the
traditional candlestick bars however it looks very different the hiking ashy
technique averages price data to create a japanese candlestick chart that filters out market noise
hiking ashy charts share some characteristics with standard candlestick charts that being
said hiking ashy charts can be applied to the same time values as regular candlestick charts
making them useful as part of a scalping day or position trading strategy but they differ based
on the values used to create each candle instead of using the open high low and close like standard
candlestick charts the hiking ashy technique uses a modified formula based on two period averages
this gives the chart a smoother appearance making it easier to spot trends and reversals but also
obscures gaps and some price data let's take a look at these charts on the left we have the first
price chart that is using traditional candlestick bars on the right we have the same price chart
using hike and ashy bars as you can see that with the heiken ashi bars it's much more smoother and
the reason why it happens is that the hiking ashy chart uses a rather complex calculation method to
derive the formation of the bars hiking ashy uses one period to create the first hiking ashy candle
and then the open is equal open of previous bar plus close of previous bar divided by two
closes equal open plus close plus high plus low of current bar divided by four
highs equal the maximum value from the high open or close of the current period
low is equal the minimum value from the low open or close of the current period
thankfully you do not need to memorize this formula to use this chart
your trading platform will automatically do everything for you the most important is to
know how the hiking actually works and how it is used the hiking ashy chart is used to identify
a given trend more easily green candles with no lower shadows are used to signal a strong
uptrend while filled red candles with no upper shadow are used to identify a strong downtrend
reversal candlesticks using the hiking ashy technique are similar to traditional candlestick
reversal patterns they have small bodies and long upper and lower shadows there are no gaps
on a hiking ashy chart as the current candle is calculated using information from the previous
candle because the hiking ashy techniques moves price information over two periods it makes
trends price patterns and reversal points easier to spot candles on a traditional candlestick chart
frequently change from up to down which can make them difficult to interpret hiking ashy charts
typically have more consecutive colored candles helping traders to identify past price movements
easily and also the hiking ashy technique reduces false trading signals to help traders
avoid placing trades during these times another big difference that you must know is that the
traditional candlestick bars have many different types of candlestick patterns you have the dodgy
gravestone dodgy the dragonfly dodgy pin bars you have the engulfing candlesticks patterns and so on
there are literally tons and tons of candlestick patterns with the traditional candlestick chart
and most of them are not reliable but the heiken ashi charts have only three main types of bars
bullish bars in decision bars bearish bars first bullish heiken ashi bars with the bullish hike and
ashi bars you will notice that there's only a wick at the top of the bar but there's no wick at the
bottom.as long as this is an up bar with no wick at the bottom we consider this a bullish signal
second in decision heiken ashi bars the indecision heiken ashi bars have wicks at both top and bottom
so regardless of whether the bar colour is bullish or bearish as long as there are wicks on both
sides we will consider this an indecision heiken ashi bar and the third is the bearish heiken ashi
bars they have a wick at the bottom but not weak at the top as long as this is a down bar with no
wick at the top we will consider this a bearish signal dot hiking hiking ashy candlestick signals
there are three primary signals that identify trends buying and selling opportunities
one green candles with no lower shadows indicate a strong uptrend this is a buy signal
an exit signal for short positions two candles with a small body surrounded
by upper and lower shadows indicate a trend change or indecision of the market
this should be your exit signal or you can wait the decision of the market in next candle
three red candles with no higher shadows identify a strong downtrend
this is you sell signal an exit signal for long positions these signals may make locating
trends or trading opportunities easier than with traditional candlesticks the trends are
not interrupted by false signals as often and are thus more easily spotted trading strategy
now that you know what are hiking ashy bars and you know the three different types of bars and
signals let's build a trading strategy this trading strategy incorporates hike and ashy
charts as one of its core components 20 and 50 exponential moving average
these two moving averages will work as a dynamic support and resistant and the reason why we chose
the 20 and 50 period is that they one of the most used moving average by big players in this market
buy rules so here are the rules for entering and managing a long position step number one spot the
trend of the market with higher time frame the higher time frame must be in an uptrend what this
means is that the high time frame has to be making higher highs and higher lows if you're trading the
five minutes or 15 minutes chart then the higher time frame would be the one hour chart if you're
trading the one hour chart then the higher time frame would be the four-hour chart if you're
trading the four-hour chart then the higher time frame would be the daily chart you can also trade
with time frame lower than the 15 minutes chart but i do not recommend because of commissions and
spread will eat away a significant amount of your edge at lower time frames step number two the 20
exponential moving average must be above the 50 exponential moving average in higher time frame
step number three go to lower time frame you're trading on the 20 exponential moving average must
be also be above the 50 exponential moving average step number four wait when the price bounces
off either of the exponential moving averages and by on the first bullish hike and ashy bar
step number five play stop loss below the low of the current swing low
step number six take profit when a bearish hike and ashi bar is
formed or when indecision bar is formed followed by a bearish hike and ashy bar
cell rules
cell rules are the opposite of buying rules simply follow the same steps
as you could see the hiking ashy charts can be useful as part of a scalping
daytarding or position trading strategy
thanks for watching in case you have any questions don't hesitate to ask in the
comments please don't forget to like the video and subscribe to the channel see you in the next video
you