Heiken Ashi Basics - Stock Market Investing Strategy

heiken ashi stock market investment trading strategy

Whether you are new to trading or are a seasoned professional, the need for a robust buying and selling strategy remains critical to the success of your investment profile. There is nothing worse for your morale or your money than a weak investment game. Patience will always win the day, but developing your personal model for when and what to buy takes its own time as well. 

The best thing you can do as an investor is research. You owe it to your future savings to investigate both companies’ stocks you hope to buy and the methods with which to buy those assets. For years, Warren Buffet has famously suggested that for one to be successful all it takes is patience: buying and holding will net you your future fortune. However, even this hands-off approach requires mountains of research, as well. 

Warren Buffet thinks that holding good companies for the long term will amass this wealth, not just buying any old business. But what about the short term? Long term growth will accrue capital in your portfolio, but there are other ways to build a successful investment that can be leveraged much sooner for some of the expenses that life throws your way. Not only so, but these methods won’t have you dipping into the savings that you hope to hold for retirement 15, 20, or even 40 years down the road. 

Engaging in forex trading or even using a secondary platform to trade in the traditional stock market in the short term can net you tremendous benefits that are more immediately realized and enjoyed. This is where more advanced commodity spotting takes place —a low intensity buy and hold strategy will not cut it here in the daily grind of stock picking for a quick turnover and fast profits. Yet even when the pace is ramped up, strategic patience remains critical. Waiting for the best point to move is always in an investor’s mind. Here is where the experts all depart from one another. 

Using the candlestick representation is common among high volume traders, but there is a better formula for displaying these intermediate pricing swings throughout the trading session than the traditional layout. 

The heikin ashi candlestick model is far more effective for displaying moving bullish or bearish trends in real time without having to wait for second or third readings after a trend has broken to confirm its movement. The difference in modeling is immediately apparent when comparing the two. The heiken ashi model filters out some of the market fluctuations to create a prominently colorized graphic that separates trends rather than regimented price movement windows. The result is a graph that is predominantly red when the price is declining and solidly green during a price surge; furthermore, the size of each bar provides higher quality context to the strength of the trending movement. 

With this method, spotting a price reversal is much easier because the data is displayed in a common-sense environment. Typically, as a quote approaches a reversal the sticks and wicks will begin to shrink, followed by a change in color and an accompanying elongation of the wicks. The indicator is astoundingly obvious and allows for a more manageable burden of risk than data displayed in a traditional candlestick pattern. While some risk is obviously necessary, marginalizing its presence is of incredible benefit to your peace of mind. 

When investing, make sure you employ every technique at your disposal to maximize returns on your investment. Diversify your portfolio and employ smarter analytics to enjoy both healthy long term returns and large, intermediate gains that will grow your confidence as well as your wealth.


I hope you enjoyed this blog post about the basics of investing using the Heiken Ashi methods.

Interested in more articles about how to invest in stocks?

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