heikin‐ashi trends made simple. ( PDFDrive ).pdf

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1. HEIKIN‐ASHI
TRENDS MADE SIMPLE.

Dan Valcu, CFTe
Educofin Ltd
MTA Webinar – November 14, 2012

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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.

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Can you find the guitar?
Man with Guitar (Braque)
The Old Guitarist
(Picasso)
Pierrot and the Guitar (Dali)

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

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

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The 10-second trend technique

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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

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HA and your risk management

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HA and your risk management

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Western introduction
February 2004

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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

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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

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

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Heikin-ashi ‘patterns’
Only three


Up Down Doji-like
3 simple HA ‘patterns’ vs. 100+ documented Japanese candlestick patterns

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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

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Visual heikin-ashi

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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

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Heikin-ashi quantification

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Heikin-ashi quantification

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Heikin-ashi quantification

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Japanese candle patterns today

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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

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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

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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

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Chart Gallery

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October 4, 2011

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haDelta to the rescue

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Heikin-ashi vs. candle patterns

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Heikin-ashi vs. candle patterns

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Heikin-ashi vs. candle patterns

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Heikin-ashi vs. candle patterns

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Heikin-ashi vs. candle patterns

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Heikin-ashi vs. candle patterns

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Heikin-ashi vs. candle patterns

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Heikin-ashi vs. candle patterns

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haDelta

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Averages with heikin-ashi

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HA and multiple time frames

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HA and multiple time frames

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HA and multiple time frames

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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

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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]

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10% off for all MTA members


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Thank you
Q&A