The Heiken Ashi Smoothed indicator for MetaTrader4 that draws the Heikin-Ashi also known as “average bar” in Japanese on the activity chart as a means of predicting trends correctly in an often volatile market.
The Heiken_Ashi_Smoothed indicator is used to isolate trends and forecast future prices. The construction of the Heikin-Ashi chart resembles that of a regular candlestick (besides its new value). The user defines the time series in relation to the type of chart (weekly, daily, hourly, etc.).
The filled bars represent the down days, while empty bars represent the up days. Lastly, all other candlestick patterns apply.
The concept of the Heiken_Ashi_Smoothed indicator can be applied to a lot of markets especially commodity and equity markets. Due to the usefulness of these trading tools, you find traders often programming the Heiken_Ashi_Smoothed indicator instructions into existing trading programs i.e. MetaTrader.
The Heiken_Ashi_Smoothed indicator gives five key signals that can be used in identifying trends and bullish opportunities:
A strong uptrend is represented by “Hollow candles with no lower shadow.”
Hollow candles represent a bullish trend and this could mean you adding to your already existing long position(s) and exiting short order(s).
A change in trend is represented by a candle with a small body which is surrounded by upper and lower shadows – some traders buy or sell at this point in a bid to maximize their entries, while other prefer waiting for confirmation before going bullish or bearish on price.
Downtrends are represented by filled candles, which means the trader might decide on adding to their sell order(s) and exiting any long position(s).
Strong trends are represented by filled candles without higher shadows i.e. hold your sell position(s) until there’s a trend change.
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart patter indicator
Customization options: Variable (pass, max), Colors, width & Style.
Time frames: 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Type: pattern, trend