The Heiken Ashi Forex Swing Trading Strategy

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The Heiken Ashi Forex Swing Trading Strategy

This is a swing trading strategy that uses Heiken Ashi. It is a candlestick chart looks like the real candlestick chart but the difference is Heiken Ashi is calculated using some information from the previous candlestick.

This is how Heiken Ashi is calculated:

Open price = average of the open and close of the previous candlestick.
High price = Is chosen from one of the high, open and close prices of which has the highest value.
Low price = Is chosen from one of the high, open and close prices which has the lowest value
Close price=Is the average of the open, close, high and low prices.

This means that the previous candlestick is related with the one that is newly formed. Because of this, a signal can be delayed like the moving average.

The color of the Heiken Ashi candlestick indicates the overall trend. It ignores the intermediate trend direction or it avoids the noise of the market. I allow you to stay on the trend.

You can use this system in a 30-minutes or higher timeframe. Use 9 EMA and 18 EMA, but other option of EMA can be considered. such as 7 EMA & 14 EMA, 10 EMA & 20 EMA or 10 EMA & 25 EMA.

Buy Entry:

  1. 9 EMA must cross above 18 EMA and price must rally away from the EMA lines.
  2. Then, Bearish Heikin Ashi candlestick must form and touches back down to 9 EMA and 18 EMA lines.
  3. The first bullish candlestick is the buy signal entry.
  4. Enter at the market price.
  5. Place your stop loss below the low of the entry signal candlestick.

Sell Entry:

  1. 9 EMA must cross below 18 EMA and price must fall away from the EMA lines.
  2. Then, Bullish Heikin Ashi candlestick must form and touches back up to 9 EMA and 18 EMA lines.
  3. The first bearish candlestick is the sell signal entry.
  4. Enter at the market price.
  5. Place your stop loss above the high of the candlestick.

TAKE PROFIT TARGETS

  • 3 times of the initial risk or 1:3 risk and reward ratio.
  • Exit at the previous swing high or swing lows

TRADE MANAGEMENT:

You can manage the trade by extracting maximum pips out of a trendy move is to use those “tops” and “bottoms” to trail stop your trades.

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