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Catching Trends with Heikin-Ashi Candles

May 18, 2025

Notes on Catching Big Trends with Heikin-Ashi Candles

Introduction

  • Many traders exit too early, missing big moves.
  • This presentation focuses on how to hold large swing trades, specifically in gold.
  • Dedicated to Deepo, who requested this video.

Key Points

  • No One Predicts Trends:
    • No one can accurately predict when a big trend will begin.
    • Focus on riding the trend once it starts rather than trying to catch the bottom or predict the top.
  • Importance of Higher Time Frames:
    • Use higher time frames to filter out noise and identify trends.

Heikin-Ashi Candles

  • Definition:
    • Heikin-Ashi means "average bar" in Japanese.
    • They smooth out price data, making trends clearer by averaging previous periods' open, high, low, and close.
  • Benefits:
    • Reduces market noise and minor fluctuations.
    • Red candles stay red longer; green candles stay green longer.
    • Larger Heikin-Ashi candles indicate strong momentum; smaller candles indicate weak momentum.

Swing Trading Strategy

  1. Daily Time Frame:
    • Analyze for direction, trend structure, and support/resistance zones.
  2. 1-Hour Time Frame:
    • Look for entries using Heikin-Ashi candles.
  3. Support and Resistance:
    • Identify breakout zones by marking support and resistance on a line chart.

Entry and Trend Reversal

  • Mark support and resistance levels on the daily chart.
  • Transition to Heikin-Ashi candles for clearer trend analysis.
  • Watch for a no-wick candle to signal a trend reversal.
  • Use the 1-hour chart to monitor bullish candles decreasing in size.
  • Wait for a bearish Heikin-Ashi candle with no wick on top for entry.

Holding the Trade

  • Hold the trade as long as bearish candles continue.
  • If price reaches a marked support level and turns bullish, it may indicate losing momentum.
  • Confirm with the daily time frame.

Exit Strategy

  • Exit only when an opposite color Heikin-Ashi candle closes.
  • Ignore small pullbacks as long as the candle remains bullish.
  • Optionally, tighten stop-loss after major swings.

Step-by-Step Guide

  1. Open daily charts and mark support and resistance.
  2. Zoom into the 1-hour chart.
  3. Look for bullish candles with no wicks at support zones.
  4. Enter decisively.
  5. Exit based on Heikin-Ashi candle signals.

Bonus Tips

  • Stick to trending pairs like gold, US30, GBP/JPY.
  • Avoid ranging markets as they can lead to frustration.
  • Use alerts and notifications on TradingView for Heikin-Ashi candle formations.

Conclusion

  • Try this method and provide feedback in the comments.
  • Open for questions and suggestions for future videos.

Full transcript