More Methods on How to Trade Using Heikin Ashi.

Let’s take a look at three more methods on how to trade using Heikin Ashi.

3. Candlesticks with small bodies showing upper and lower shadows indicated a possible trend reversal (or trend pause).

Open a position opposite the current trend since the trend may be coming to an end.

Keep in mind that though that IF the next candlestick changes color, it does NOT always mean the end of a trend, it could just be a pause.

4. Red candlesticks signal a downtrend.

When the Heikin Ashi candle changes from green (bullish) to red (bearish), it’s a sign that the price might be about to turn lower.

If you’re currently in a long position, you may want to exit.

If you’re currently in a short position, you may want to add to your position.

5. Red candlesticks with no upper shadow or wick indicate a strong downtrend.

Notice the amount of red shaved heads? That’s a strong downtrend.

Stay short and until the Heikin Ashi candlestick changes color, from red to green.

Stay short and ride the downtrend as long as no upper shadows appear and let your profits run.

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