There are broadly 5 rules that need to be followed when trading with Heiken Ashi Candles.
Rule Number 1 – Green candles with no lower “shadows” indicate a strong uptrend: When you spot these on charts, be in the trade and don’t think about profit booking. You might want to add to your long position and exit short positions.
Rule Number 2 – Candles with a small body with upper and lower shadows indicate trend change: These are indecision candles and require more confirmation.
Rule Number 3 – Red/Black candles with no upper shadow indicates strong a downtrend: When you spot these on charts, be in the trade and don’t think about profit booking. You might want to add to your short position and exit long positions
Rule Number 4 – Candles with long lower shadows represent Buying interest. Always take note of these candles and assess price action after you spot these candles.
Rule Number 5 – Candles with long upper shadows represent selling interest and be cautious with existing long positions if you spot such Candles.
Read more at https://tradingwithtrend.com/heiken-ashi-strategy
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