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Richard III

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I am using Fibonacci Trader. In the candlestick setup there is an option for Heiken Ashi mode. I can see the visual differences however, I do not understand the technical implications. Of course the help files within the platform do not address this feature. I have yet to find a definition or explanation in any net searches. your help would be greatly appreciated.

 

Thank you,

Richard III:confused:

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HA is meant to ease the eyes to identify trending or direction of the market action. For many, raw price action is difficult to read and understand so this method a simple red (downtrend) or green (uptrend). I don't use it myself but it's quite helpful for beginners. But one caveat, in non-trending markets, HA can produce false signals so beware. You mean need another indicator or tool to compliment this indicator. Good luck.

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I am using Fibonacci Trader. In the candlestick setup there is an option for Heiken Ashi mode. I can see the visual differences however, I do not understand the technical implications. Of course the help files within the platform do not address this feature. I have yet to find a definition or explanation in any net searches. your help would be greatly appreciated.

 

Thank you,

Richard III:confused:

 

Hi Richard,

 

I've used Heiken Ashi charts (many years ago) exclusively for one thing...

 

Volatility Analysis.

 

It was easier to see volatility change via contraction/expansion in intervals as price action traverse from one interval to the next interval.

 

Thus, HA charts was extremely useful for identifying volatility changes which is a critical aspect of my trading.

 

However, on the flip side, it put me at a disadvantage for GAP Analysis and Support/Resistance Analysis which are other critical aspects of my trading.

 

Thus, I went back to normal candlestick charts and learned how to see the volatility changing without the help of HA.

 

Simply, HA charts presents itself as a smoother flow (more blending) of the price action from interval to interval...

 

Reason why some traders that use HA will use the phrase its easier to see the trend.

 

However, that's ok if gap analysis, long shadow analysis or support/resistance analysis isn't part of your trade methodology.

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