heikin ashi trends made simple. - mta.org · pdf filecandlestick patterns) simple, easy to...

HEIKIN‐ASHI TRENDS MADE SIMPLE.

Dan Valcu, CFTe

Educofin Ltd

MTA Webinar – November 14, 2012

Educofin Ltd web site: www.educofin.com e-mail: [email protected]

Join Us on Twitter @educofin

Disclaimer The material provided in this presentation is for general informational purposes only. This Information is not intended as investment advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security, or fund. The opinions and analyses included in the presentation and subsequent communication are based on sources believed to be reliable and written in good faith, but no representation or warranty, expressed or implied is made as to their accuracy, completeness or correctness. We cannot and do not assess or guarantee the suitability or profitability of any particular strategy, or the potential value of any strategy or informational source. You bear responsibility for your own investment research and decisions, and should seek the advice of a qualified professional before making any investment. You may lose part or all of your investment, and if you engage in margin transactions your loss may exceed the amount invested. Further, performance in the past is no guarantee of that in the future, and each member of this audience understands that some results in this presentation are the results of backtesting, and as such are merely hypothetical.



Can you find the guitar?

Man with Guitar (Braque)

The Old Guitarist (Picasso)

Pierrot and the Guitar (Dali)



Which chart looks better? Japanese Candles vs. Heikin-Ashi Candles



Heikin-ashi in a nutshell 1. Visual 2. Quantifiable 3. Replacement or confirmation for candlestick

patterns



The 10-second trend technique



Understanding heikin-ashi Price filter technique for discretionary trading Can be used as a stand-alone or confirmation

technique Visual (HA charts) + quantification (haDelta) Delays (HA charts) + earlier signals (haDelta) BYO money & risk management



HA and your risk management



Western introduction February 2004



Heikin-ashi and the brain

Right Side

Visual heikin-ashi

HA candles

Left Side Quantifiable heikin-ashi haDelta & Co.

Heikin-Ashi

Heikin-ashi appeals to all traders/investors



Heikin-ashi as a visual tool Japanese-style technique Heikin-ashi (modified) candles Appeals to right-side of the brain (visual traders) Heikin-ashi candles

Can you trade only with visual tools? Yes/No



The heikin-ashi foundation Modified OHLC values: haClose, haOpen, haHigh, haLow



Heikin-ashi ‘patterns’ Only three Up Down Doji-like

3 simple HA ‘patterns’ vs. 100+ documented Japanese candlestick patterns



1 A sequence of white bodies identifies an uptrend A sequence of filled bodies identifies a downtrend

2 Uptrends get stronger with longer white bodies and upper shadows Downtrends get stronger with longer black bodies and lower shadows

3 Trends get weaker with smaller bodies or when both lower and upper shadows emerge

4 A consolidation is revealed when a series of smaller bodies with both upper and lower shadows emerges

5 A trend reversal is likely with the emergence of a small body with long upper and lower shadows (doji-like candle) or a sudden color change

Heikin-ashi rules



Visual heikin-ashi



Heikin-ashi quantification

Heikin-ashi candles can be quantified Western approach to analysis and trading Technical indicators (left-brained, analytical

traders) haDelta & Co.

“If you cannot measure it, your knowledge is of a meager kind.”

Lord Kelvin



Heikin-ashi quantification



Japanese candle patterns today



Japanese candle patterns 100+ patterns Fluid definitions Subjective interpretations “In the context” Many patterns are complex

For visual traders, for connoisseurs Problems with trading JC patterns Quantifiable strategies added



All in one Heikin-ashi provides only 3 ‘patterns’ 5 rules

For both visual and analytical traders/investors Heikin-ashi candles and indicator(s) Very short learning curve Heikin-ashi does not care about context



Heikin-ashi vs. candle patterns

Heikin-Ashi Candle Patterns

3 ‘patterns’ 100+ patterns 5 rules ‘N’ rules/pattern

Short learning curve Long learning curve Small investment (time, $) Big investment (time, $$$)

Visual + Quantifiable Visual More objective Subjective, artistic



Chart Gallery



October 4, 2011



haDelta to the rescue



Heikin-ashi vs. candle patterns



haDelta



Averages with heikin-ashi



HA and multiple time frames



Conclusion A visual and quantifiable technique For trends and reversals (suitable to replace

candlestick patterns) Simple, easy to learn and apply Only 3 ‘patterns’ and 5 rules Used as a stand-alone or confirmation tool BYO risk and money management As with every indicator, HA is NOT a $$$ printing

press



Heikin-ashi+ Author of the the first book on heikin-ashi Site: www.educofin.com Blog: heikinashi.wordpress.com Weekly newsletter Twitter: @educofin &

@heikin_ashi Services: Webinars, seminars, HA

implementation Email: [email protected]



10% off for all MTA members www.educofin.com/MTA.htm Valid until November 18, 2012



Thank you

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