Heiken Ashi (or Heikin Ashi,
As you see, white bodies are the uptrend candles and the red bodies are the downtrend candles. The upper shadows are usually absent on the downtrends and the lower shadows are absent when the trend is going up. There are 5 Heiken Ashi scenarios for trends:
- Trend is normal. Rising white bodies signal ascending trend and falling red bodies signal descending trend.
- Trend is getting stronger. Rising longer white bodies with no lower shadows for ascending trend; falling longer red bodies with no upper shadows for descending trend.
- Trend is getting weaker. Candle bodies become shorter and for ascending trends lower shadows occur, for descending trends — upper shadows.
- Trend consolidation. Small candle bodies with both upper and lower shadows.
- Trend is changing (not accurate signal). Very small candle body with long upper and lower shadows.
Thats all you have to know to trade on the trends successfully if you are using Heiken Ashi charting method. But I also recommend reading some other article on Heiken Ashi if you want to learn more about using it.