Forex indicators

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Forex indicators

Post  ilearn2t on Thu Aug 16, 2012 10:15 pm

Hello Everyone

The "Heiken Ashi" is an indicator believed to date back to the 1700's used mostly by rice merchants in Japan. Formerly being used very little in the Forex market, it has been growing more popular among traders now using the candlestick bar. Traders tend to use the "Heiken Ashi" to determine the relative strength of a trend and to pinpoint the key turning points in price behaviour.

The "Heiken Ashi" indicator takes follows the basic candlestick information: Open, High, Low, and Close, and then even outs the unpredictable portions of the chart in much the same fashion as would a moving average. Traders can then judge the possible decision without the volatile movement (usual around the Economic releases).

Here is how each candle is constructed:

1. Close = (Open Price + High + Low +Close) / 4
2. Open = (Average of Open Price and Close Price of the previous bar)
3. High = (Maximum value of the (High, Open, Close))
4. Low = (Minimum value of the (Low, Open, Close))

It is highly recommended that the "Heiken Ashi" be combined with another indicator to provide confirmation of interpretations.

Good luck
ilearn2t
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