Smoothed Heiken Ashi: Always Know The ACTUAL Trend

one of the most important conditions for entering into a position with most strategies is to First determine the trend as you can see here with this example we can see that the price action made multiple moves to the upside however we can also see that the price made multiple moves to the downside if we take a closer look at the price action we can also see that during these moves there were also candlesticks going in the opposite direction a solution to this are the hike and ashy candlesticks which smooth the regular candlesticks and reduce the noise in the market as you can see once we added the hike and ashy candlesticks to the Chart the price action is smoothed out and the market noise is significantly reduced which causes us to easily see whether the trend is bullish or bearish even though the hike and ashy candlesticks work great at clearly showing us the trend there is one massive drawback that prevents us from fully utilizing them the drawback we are talking about is that hike and ashy candlesticks do not show us the real high low and close of the candlestick this means that support and resistance zones are not accurately reflected back tests won't be accurate and delayed signals can be given along with this hike and ashy candlesticks can provide us with inaccurate readings of the market if the market is less volatile or choppy meaning that the smoothing effect can cause us to miss important price movements the solution for this problem is the smooth hike and ashy indicator which plots smooth hike and ashy candlesticks along with the price action let's first add the indicator to the chart to do this head over to the indicator search Tab and search for the smooth hike and ashy indicator select the indicator made by Jack and add it to the chart now let's change the indicator settings click on the indicator settings tab and navigate to the style settings here we will be changing the opacity of the wick so that the chart becomes easier to read that was all that we needed to do now let's take a look at how the indicator works the smooth hike and ashy indicator Works a bit differently than the regular hike and ashy candlesticks the main difference is that the smooth hike and ashy indicator plots the hike and ashy candlesticks as a moving average if we take a look at the input settings of the indicator we will see that there are two values that can be changed these two values represent the first and second smoothing that is applied on the candlesticks as you can see if we increase the smoothing values the indicator will be a lot less choppy but provide less precise signals increasing the value of the smoothing is recommended for spotting larger Trends or when using the indicator in higher volatility markets the opposite is true when we lower the values when we do this we make the indicator more precise however the indicator becomes a lot less accurate meaning that the indicator will frequently switch Trends using lower values is better for spotting shorter term Trends in lower volatility markets because the default lengths are a good middle ground we will change the lengths back to default now let's take a look at how we can read the indicator but before that if you are looking to back test your own strategies then check out Trader Edge it's used by thousands of traders to back test their strategies if you sign up via the link in the description you will also receive over 470 dollars worth of bonuses including a step-by-step back testing plan a course on building a profitable mechanical trading strategy and four high quality pre-made strategies to get all of these free bonuses along with a seven day free trial sign up via the link in the description there are a few ways of reading the indicator the most common way of reading the indicator is by concluding that when the smooth candlesticks are red we are in a downtrend and when the smooth candlesticks are green we are in an uptrend it's also recommended to wait for two candlesticks that go in the opposite direction to appear before determining that the trend has switched another powerful way of reading the indicator is by looking at the position of the price action relative to the smooth hike and ashy candlesticks you will often notice that when the current trend of the market is bearish the price action will be trading below the smooth candlesticks when the trend is bullish the price action will usually be trading above the smooth candlesticks knowing this we can spot reversals before the color of the smoothed candlesticks changes as you can see here the price crossed above the smooth candlesticks this means that once the candlesticks turn green there will be a high probability of the uptrend continuing besides Trend reversal trading the indicator can also be used in Trend following strategies this is because the smooth candlesticks can act as Dynamic support and resistance zones in this example we can see that during the downtrend the price frequently moved up to the smooth hike and ashy candlesticks before rejecting them and continuing in the downward Direction in this case we see that the market is currently in an uptrend because of the green smooth candlesticks however during this uptrend we can see that the price made multiple pullbacks to the smooth hike and ashy candlesticks once these pullbacks were made the price continued in the upward Direction showing us how the indicator can be used to spot support and resistance zones a less common way of reading the indicator that can provide even more accurate signals is by having multiple smooth hike and ashy candle indicators on the chart we currently have two smooth hiking ashes added to the chart one has a value of eight and the other has a value of 20. as you can see by having multiple smooth candlesticks on the chart we can see both the shorter term and the longer term trend in this case we can see that both the shorter term and longer term smooth candlesticks are red indicating that there is a long and short-term downtrend playing out showing us that it's a good idea to enter into a cell position once the price makes a pullback here we can see that only the short-term hike in ashy candlesticks were green making it a bad idea to enter into the position since the long-term trend is still bearish the double smooth hike in Ashi can also be used to spot long and short-term support and resistance levels if the price pulls back to a shorter term smooth hike in ashy while the longer term smooth hike in Ashi is still bullish we know that there is a greater chance of the price respecting the support Point instead of breaking through it it's also important to note that trading based on crossovers from the two smooth hike and ashy indicators is not advised this is because when utilizing crossovers with this indicator it is likely that delayed signals will be provided meaning that the large move will already have happened when the signal is provided now that we know how the indicator works and how we can read the indicator let's take a look at different entries that can be made with the indicator we are currently looking at USD JPY on the one hour time frame we can see that both the long and short-term smooth candlesticks are green along with this we can see that the price is trading above both of the indicators however if we take a closer look at the price action we can see that the price is currently making a pullback to the shorter term aha candles if we look at the previous price action we can also see that there was a small consolidation period at this price level this indicates that the price level could be a support Zone all of these signals show us that this might be a good opportunity to enter into a buy position before entering into the position let's first wait for the price to bounce off the support Zone and the ha candles we can see here that the price action respected both the ha candles and the support Zone along with this we can also see that all of the ha candlesticks are still green so let's enter into the buy position we will be placing the stop loss at the recent swing low for the take profit we will be targeting a recent swing High aiming for a risk to reward ratio of at least two here we see that there was a small consolidation that took place so let's place the take profit here now let's see how the trade plays out for this example we will only be using one smooth hiking ashy candle indicator with default settings we can see here that a downtrend was playing out the downtrend ended due to a short uptrend during this uptrend the price action frequently tried to break through the smooth ha candlesticks however if we take a look at the price action now we see that the price broke through the ha candlesticks showing us that there is a high likelihood of the previous downtrend continuing before entering let's first wait for the ha candlesticks to turn red to confirm the signal as you can see this occurs here so let's now enter into the position we will be placing the stop loss at the recent swing High for the take profit we will be targeting a recent swing low aiming for a risk to reward ratio of at least two if we take a look at the past price action we can see that a small consolidation period took place here so let's place the take profit at this point now let's see how the trade plays out as you can see the smoothed hike and ashy candlesticks is an extremely powerful indicator that can help us combine hike and ashy candlesticks along with the actual price action if you enjoyed the video please leave a like And subscribe to the channel so that we can keep making these free videos

Channel: Switch Stats

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Keywords: forex trading, smoothed heiken ashi indicator, trading, stock market, crypto, crypto trading, Smoothed Heiken Ashi, Trading Indicators, Technical Analysis, Trend Trading, Forex Trading, Stock Trading, Day Trading, Swing Trading, Candlestick Charts, heiken ashi, indicator, strategy, 5 minute trading strategy, 15 minute trading strategy, 1 hour trading strategy, timeframe, switch stats

Id: aRo_kMogFfA

Length: 9min 4sec (544 seconds)

Published: Wed Apr 19 2023