HOW TO TRADE Heiken Ashi Stochastic Strategy (HEIKEN ASHI Trading Strategy) 🔥🔥

HOW TO TRADE Heiken Ashi Stochastic Strategy (HEIKEN ASHI Trading Strategy) 🔥🔥

– [Heiken Ashi Trading Strategy]
Welcome to the video on How to Trade Heiken
Ashi Candlesticks Stochastic Indicator Strategy. In this Heiken Ashi
Trading Strategy, we look into low-risk trading
setup that works really well. I will be taking up
five case studies across different asset
classes to explain the details working of this
Trading Strategy. Now what I am gonna
explain here is very simple and this is something you
can start implementing from Monday morning. So let’s get started. In this Heiken Ashi
Trading Strategy, Stochastic Indicator
has a big role to play. Stochastic Indicator
here is mainly used to time trades in the Market. For this trading strategy, we
are using Stochastic Indicator with 15 comma three
comma three as parameter, and the time frame
for this strategy is daily time frame chart. If you want more entry
signals through this strategy, then you can choose eight
comma three comma three as Stochastic
Indicator parameter. Do remember that
with this setting, you will get more trades but you will also
get more whipsaws. I would recommend
for you to stick with default setting for now, and once you understand
this concept fully, you can then experiment
with different parameters. Standard Stochastic Indicator
and Heiken Ashi Candlesticks is available across all
platforms and you won’t need any special software for
this Trading Strategy. Let us first understand
the type of Candlesticks you would need to know in this
Heiken Ashi Trading Strategy. The first marking on the
chart that you see here are of wide-range demand candles that represent up move in price. The second markings that you see are wide-range supply candles. These candles give you a sense
of momentum on the downside. The third markings
you see now is that of narrow-range supply candles. These candles suggest lack
of momentum on the downside and identifying these
candles is the key towards trading this strategy. If possible, take a
screenshot of this chart and keep in mind how to
identify each candlestick type. In the various
case studies ahead, I will show you the importance
of identifying candles in this Heiken Ashi Strategy. The main purpose of Heiken
Ashi Candlesticks here, is to identify strength
of demand and supply, while deciding whether to
enter the trade in the market. Let us now look at how
Heiken Ashi Candlesticks and Stochastic Indicator is
usually used to take trades. When Heiken Ashi
Candlesticks and Stochastics is combined together, the
most common way to trade is to buy when Stochastic
Indicator moves below 30 and to short when Stochastic
Indicator moves above 70. This is a method that is
recommended in various sources. And while the basic
concept is right, execution of this method
has to be very selective. The main reason for this is,
if you go behind every signal that is generated on the chart, you will face
unnecessary drawdowns. In this chart, look
at all these instances where Stochastic Indicator
has moved below 30. Had you bought based
in these regions, you would have faced
lot of whipsaws. Therefore, it is very
clear that traditional way of using Heiken Ashi
Candlesticks and
Stochastics Indicator is not the ideal way. There have to be
specific instance when both should
be used together, to identify low-risk
trading opportunities. Let me now show you the entire
framework for this strategy. So let us now see how to
combine both these together. Now do remember ole of
Heiken Ashi Candlesticks here is to identify right
entry conditions. And by right entry conditions, I mean conditions where demand
in price is clearly visible. Let me now explain this. Look at this phase in
the market where price clearly moves lower. In this phase, wide-range
Heiken Ashi Candlesticks are clearly visible. There is definitely supply
visible in this entire phase, if you see. When Stochastic moves below 30, I would avoid buying
in this stock, as down move has happened
on back of wide-range Heiken Ashi Candles. This clearly represents presence of strong sellers in the market. Look at this region now. Stochastic Indicator
is clearly below 30 but I would again
refrain from buying here as down move has
again happened on back of wide-range
Heiken Ashi Candles. Let us now look at this phase. Stochastic here again moves
below 30, but this time around, look at the down move
candles in this region. Most of the candles, if you
see, are narrow in range and do not represent strong
momentum on the down side. This is the precise setup
that we need to focus upon in this Trading Strategy. Narrow-range candles here
represent lack of supply and hence this is a
low-risk entry opportunity, when compared with
phase one and phase two. I hope this particular
aspect is clear. Let us look at one more example on how to combine
these together. In this phase, if you see, Stochastic Indicator
has moved below 30 and price moves lower on back
of four Heiken Ashi Candles. Out of these four Candles, there are two Candles
that are wide in range and represent momentum
on the downside. When I spot this on chart, I
refrain from taking the trade. Do note that I don’t
mind missing out on this entire
trading move here, as I’m only focused
towards high probability, low-risk trading setups. Now in this phase,
Stochastic Indicator again moves below the 30 region. Look at price in this region. Price has again moved lower
on back of wide-range candles. I would again refrain
taking trade in this region, due to presence of
clear downward momentum. I would use the same
reason to reject trades in this region and at this zone. Look at all these candles here, at least two candles are
clearly visible in both cases, where downward momentum
is clearly visible. If you look at this phase, I
will take up a long trade here as downward momentum
is clearly missing. I can just spot one
wide-range Heiken Ashi Candle, and that does not represent
supply on the downside. So out of these five instances
that I have discussed, I would only trade
in this instance where condition of demand and Stochastic
Indicator is fulfilled. I hope this oral
concept is clear. Before we move forward, let us
look at the three main rules we need to apply in this
Heiken Ashi Trading Strategy. Rule number one,
when price pullbacks, make sure momentum is
absent on the down side. Always measure this with
range of the Candle. Rule number two, Stochastic
Indicator should be below 30 and preferably both
Slow and fast Stochastic should be below the 30 level. Rule number three,
always prefer stocks with high relative strength
ratings and do check for volumes to analyze the overall trend. Price should also be above
the 100-period Moving Average. Now we have looked at rule
number one and two in detail, and let us take up rule
number three first, and then we will combine
all of this together, I’ll also be explaining
how to minimize whipsaws towards the end of this video. On this chart, I have plotted
100-Day moving average along with Heiken
Ashi Candlesticks, Relative Strength and
Stochastic Indicator. Code for Relative Strength
Indicator for is given in the
comment section below. When you are looking to trade
this Heiken Ashi strategy, make sure you check for
relative strength of the stock. For long trades,
relative strength line should be clearly moving higher. This represents stock
is outperforming
the broader market. In this chart, if you
see, Stochastic Indicator moves below 30 in
these five regions. In the first four regions, if
you see, pullback has happened on back of narrow-range candles, and each region here
provides entry opportunity for long trade. Look at all these candles here, all candles are
narrow-range candles while the pullback is happening. In the fifth region here, I
would avoid taking the trade as price has moved lower
on back of wide-range Heiken Ashi candles. Once price moves below
100-period average, look at how frequently
Stochastic Indicator
starts moving below the 30 mark. This clearly signifies
that trend has weakened, and long trades
should be avoided. So now let us look into
instances when you have to avoid trading this strategy. In the previous slides, I
mentioned that when pullback is on back of high
momentum candles, then avoid taking long trades
based on this strategy. One more instance where you
should avoid taking trades is when price is clearly below
the 100-Day Moving Average. Now we are the using
100-period average here as a trend reference
indicator and hence, when price is above
the 100-period average, focus on taking
long trades only. When price is below
the 100-period average, only focus on
taking short trades. In this particular case, you
are aligning with the trend, and you are measuring
the direction of trend by using a simple
100-Day Moving Average. In this chart, I will
avoid taking long trades in this region,
and at this point, because of two main reasons. Number one, down move in both
of these cases have happened on back of wide-range
Heiken Ashi Candles, and in both these instances, price decisively is below
the 100-day period average. I hope this point is clear. In this region on the chart, I will be open to
taking long trades, as pullback has happened on
back of narrow-range candles and Stochastic is clearly
below the 30 mark. Before deciding
on taking a trade, always account for momentum
in form of wide-range candles and account for price trend. This way, you will ensure
that you’re on the right side of the trend at all times. Let us now move to
specific case study to understand this
Trading Strategy better. In this case study, I have taken
up AT&T stock as an example that is traded in the
U.S. stock market. In the cases ahead, I have
taken up Currencies, Commodities and Index Futures to show
application of this concept across all asset classes. In this chart, if you see, price traded below
the 100-day average ’til this particular point. During the same period,
relative strength line clearly suggested that
AT&T was underperforming the broader market. Price then moves above
the 100-day period average at this point and
Stochastic Indicator moves below the 30 zone in these
regions that I’ve marked. If you look at
all these regions, long entry trade cannot be taken as price has clearly
retraced on back of wide-range
Heiken Ashi Candles. This clearly represents strong
momentum on the downside and presence of strong
sellers in the market. For a long entry in the stock,
make sure price is above the 100-day average
or is in a structure of higher high and higher low. Along with this, Stochastic
Indicator needs to be below the 30 region on back
of narrow-range candles. Momentum on the downside
has to be lower, as this would be a clear sign
of low supply in the market. Do keep this important
point in mind. This case study is of
American Express stock that again trades
in the U.S. Market. In this chart, Stochastic
moves below the 30 zone in these specific regions. Out of these regions, long
entry can only be considered in these two regions, where
price is clearly above the 100-day period average. In both these instances,
price retracement has happened on back of narrow-range candles. This clearly reflects low
momentum on the downside. Do take a look at relative
strength line as well. As price moved higher
from January 2019, relative strength line
has steadily moved higher. This means stock has
outperformed the broader market. Do note here that we are
looking for low-risk combination of price retracement along
with signs of less supply on the down side. This combination actually
works really well and you should
explore this further on a daily timeframe chart. You can try this on a
60-minute timeframe as well, but I would first
recommend for you to start with daily timeframe. Along with this combination, you also need to
check for volumes, and I will explain this
towards the end of this video. Let us now look at
Gold as a case study. This is a complex case and
hence do pay attention. In this chart, price is
moving above and below the 100-period average
and Stochastic Indicator moves below 30 in these regions that I’ve marked on the chart. Out of all these instances, entry can be taken
only in this instance as price has moved lower on
back of narrow-range candles. If you look at price here, it is not above the
100-period average, and yet if you find
this on the chart, you can still go ahead and
take a long trade here. Now the reason why long
trade is taken here, despite price being below
the 100-period average, is because the structure of
higher high and higher low is clearly evident
in this region. Do note that if price is
below the 100-day average, and you still find structure
of higher high and higher low being in place, you can
still attempt a trade. But do remember that
position size for that trade has to be very small. In this fourth Case,
let us take a look at Grasim Industries stock
that trades in our market. In this chart,
Stochastic Indicator moves below the 30 region
in these four instances. Based on the rules discussed
in this trading strategy, long entry would
only be available at
first two instances. In these two instances,
retracement has happened on back of narrow-range candles. This clearly reflects lack
of momentum on the downside and hence this becomes our
ideal range to enter the stock. In the last two
instances, if you see, retracement has happened
on back of wide-range Heiken Ashi candles. This clearly reflects high
momentum on the downside and presence of strong
sellers in the market. Once you spot this on the chart, avoid taking the long
trade in these regions. Do remember that by
not taking trades, you will miss out on
some opportunities, as price will still head higher. But, as a trader, at all times, you have to focus on low-risk
trading opportunities. This has to remain your
number one rule in trading. In this fifth Case, we look
into USDINR Currency pair to understand this Heiken
Ashi Trading Strategy further. Price in this chart is
above the 100-Period average and Stochastic Indicator
moves below the 30 region in these two phases. Both these phases are marked
here where price retraces as Stochastic Indicator
gradually moves
below the 30 zone. In the both these phases, I will be open to
taking long trades as only one wide-range
candle Heiken Ashi Candle is visible on the downside. As a trader, you should be
fine with one wide-range Heiken Ashi
counter-trend candle. But if you spot more than
one wide-range candle, then avoid taking the trade. As you are starting
with this strategy, prefer those charts
where you have no wide-range candles present. As you gain more experience,
you can then opt for charts with one or even two
wide-range candles present on the chart. Let me now explain how you
need to minimize whipsaws in this Heiken Ashi Strategy. The first rule you
have to look out for is the retracement criteria. You have to make sure that
price retracement happens on back of narrow-range candles. When I back-tested
this strategy, I found that retracement on
back of narrow-range candles was an excellent filter
to minimize whipsaws and maximize average
profit per trade. The second rule
you need to track is impact of volumes
on the chart. Make sure that retracement
happens on back of low volumes. This would clearly
reflect absence of strong sellers in the market. If you can also
spot rise in volumes in the direction of trend, then this would be one
more factor to consider. As far as stock selection goes,
for this trading strategy, you can shortlist both high
beta and low beta stocks. Now do remember that the
important aspect here is to identify low-risk
entry opportunities. You will miss some of the
opportunities in wake of this, but do not get distracted. At all times, your
aim needs to be on preserving capital
while focusing on your money management rules. Do watch the previous four parts on Heiken Ashi Candlesticks,
as I have covered many concepts in great depth, across
various time frames. Link to all these
parts will come up at top right end of your screen. In the meantime, if
there is any doubt, do let me know in the
comment section below, as I reply to each
and every comment. So kindly consider
hitting the like button and sharing this video
if you find it useful. Thanks a lot for
watching this video guys. Take care and be safe.

Comments (95)

  1. Here after will add stochastic also..thanks bro….waitng for your options video..
    HA+VWAP+VolumePro+MA is near holy grail thanks a ton ronauk bro.

  2. Link to All Heiken Ashi Candlesticks Videos Is given here.

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    Thanks For Watching Guys. Tc & Be Safe.

  3. Sir please tell this is which analysis platform.

  4. Thank you so much Ronauk. I have a question here. How can we get Relative Strength.

  5. Nicely explained !!

  6. Thanks sir for the method!!
    What is the red line on RS indicator?

  7. Thank you for the video. Sir why you have moved from using 200 dma to 100 dma moving average in your recent strategies. I remember 200 dma was the trend reference u choose in earlier strategies on daily time frame

  8. In tradingview I did not find the RSI with moving average as shown by you in your chart…could you pl help.

  9. awesome hack bro, we can take nifty 100 or sensex as benchmark for relative strength, but what for commodity and currencies?

  10. Sir, plz tell When should we close the trade?


  12. very good teching i love this Heiken Ashi stochastic stratey

  13. jo English nahi sanaj pate hai un ke bare me bhe soocho?
    Plz Hindi me bhe video banaye

  14. Can't use this method on coming monday :). Its holiday. Just kidding. Thanks for making this video

  15. Thank you sir.
    I would like to ask a clarification based on one chart image. How can I send you through you tube.

  16. Great work sir . Was eagerly waiting for this combination. One doubt though, when to enter the trade is it when stochastic lines go beyond 30 levels or when they emerge from low levels nd just cross the 30 level

  17. ತುಂಬಾ ಚೆನ್ನಾಗಿ ಮೂಡಿ ಬಂದಿದೆ ಸರ್ ಹೀಗೆ ಮುಂದುವರಿಯಲಿ

  18. Hi Sir thanks once again for this video..
    1 question?
    Can we set this strategy in a 15 min to 30 Min time frame for Intraday trading

  19. Sir, Heiken Ashi Series Very Informative & Interesting Also. I have watched full series and feel confident in trading in spite of that I am not highly educated. Thank U Guru Ji.

  20. Sir, Thank you so much. As of now, just viewed only half video. will watched full now only and will watch again & again to understand in detailed. However, please advise me RS mean Relative Strength Indicator ? which is also called as RSI.

  21. Thanks bro!✌ can you make more vedio on INDEX trading please

  22. As usual innovative and useful.
    Will be oblgied if some series would be made on Nifty Trading Strategy.

  23. Effective strategy to follow with Haiken Ashi + Stochastic. Very good.

  24. Looks promising, What a great video on such a special day.

    SIr this is something that excites me.
    Whipsaws are exhausting and we need the filters you mentioned.

    Thanks your concepts are wonderful. 🙂

  25. Sir i have been started one year ago and I used almost all strategy but still I am in negative so if you suggest something best for me , yes i know in market nothing is best . Because in every video you shared strategy I used it so pls suggest me I am totally confused which strategy should i follow.


    Would have bought in any of the situation?

    I would have considered buying only in the 5th instance.

    Correct me if I am wrong.


  27. hi… i wouuld suggest u to make a video on stoploss for intraday…a humble request

  28. You are brilliant sir . Stochastic charts are too good to spot Buy-Range /sell range . Combining these Heiken Ashi and stochastic is a brilliant move . One problem frequently fasted in stochastic is continously 100 's and 0 's occur . No way to find when to buy/sell . Kindly clarify . Thanks . YOU SIR ARE BRILLIANT . HONEST TRUTH !

  29. simply on stochastic extrems candle range should be narrow on daily time frame'

  30. Thanks for making combo stretegy with Price action+MA+stochastic
    Can we use for shorting of stocks with reverse of MA and stocchestic above 80?

  31. Nice framework brother for positional trades. Waiting for your options videos for developing my own set up.

  32. Sir , Thanks for excellent video. Sir, in Trading view dot com there is StochasticRSI. How it is differ from normal Stochastic ?. Please clarify.

  33. since the market is in downside and we do not know when the market will reverse. Can we use this method for shorting or buying puts? considering all exact opposite of it?

  34. Excellent one, there is something new to learn from every video of yours, i liked the way you stressed on the retracement and for sharing the case studies!

  35. your video is nice but plz sir hindi me video banayenge to ham jaise kam padhe likhe logo ko samaj mai aayega dhanyavad…

  36. this strategy is for short term…right sir? Can this be used to select stock for intraday…

  37. Hi Tradewithtrend,
    Once again a nice strategy. I tried to search for trade setup using this strategy on more than 30 stocks in the current mkt situation unfortunately did not find a single long trade setup. Could you please guide on this

  38. Thanks a lot for your time and effort. Thanks for teaching us on when to trade, when not to trade and why. Thanks a ton for enlightening the community. Have a nice time.

  39. Happy Birthday !!! many many return of the day. Thanks for sharing such a great strategy.

  40. Dear, you hv given lot of strategy; but u also know that apart from strategy physcolog n money management plays a great role. Can I expect some light on these topics from ur treasure.

  41. Sir one video on intraday stock selection and intraday pls.

  42. Premium content, highly useful..

  43. Really Fantastic presentation, with PURE CONTENT and no HANKY PANKY as what we usually see with other presenter. I am really thankful to the presenter to make such a wonderful technique with eye catching Presentation skills. I love you Buddy !!!!

    TRADINGVIEW.COM code for Relative strenght indicator is missing…..I request please upload the Link!!

  44. Very nice strategy ..if I want to use in 1hr chart which moving average is ideal?

  45. Can we use top down approach in this strategy?…& Thank u sir for ur effort….

  46. Thanks for a very informative and excellent video.

  47. Whether we should look for the stochastic entering 30 or reversing from 30. As many a times stocks falls and stochastic stays below 30.
    Look for HDFC, stoch below 30 for a long time and stock is falling..

  48. Great video Sir
    How to define a long range or narrow range candle…

  49. Hi sir. The way you explaining the things itself says that you're professional trader. I like your videos very much. I kindly request you to make a intraday live trading video. Step by step from choosing the scrips entry stop loss and trailing stop loss and where to exit. It will be very helpful for most of our subscribers. Thank you once again I hope you will do it.

  50. Thank you. Can I use the same strategy in smaller time frames ?

  51. Belated Birthday wishes, Raunak🎂🎂 one more nice strategy…👍

  52. Good combination, was trying but you made it lot better 👌✌

  53. can this be used for intraday with 15 minute charts effectively?

  54. Sir what is the red line the..
    Relative strength line

  55. Nice video…👍👍👍👍

  56. Sir can I use this pattent for 5 min

  57. Sir I follow your trading strategies.
    Sir I want to know books related to fundamental analysis
    Sir plz help me

  58. sir, if u allow , i want to publish relative strenght indicator on, with ur name..and make it available for public view…so that now onwards every one can utulize this

  59. Good morning SIR ,Belated happ birthday Sir ,was using this strategy but concept is now very clear with moving average and candles structure , thanks sir for adding one more page of knowledge .

  60. How can I use this strategy for short trades like 2 minutes??

  61. Nice strategy Bro… Try to make opinions trading strategies and advice stock sizing or position Bro… Thank you for sharing ur knowledge to us

  62. Sir nice vedio. but in the upstox RS is not available pls suggest which web site i can use to practice this method

  63. Hello sir,
    I request you to kindly suggest a reliable broker. My broker in the name of server issue does not allow to put SL or even sell at market price. This is a routine. Their sever becomes superfast once the price retraces back to mean. Kindly guide. Thank you.

  64. This is the first video that I think I understood completely and looks very promising. I watched more than two times and still could not see if you discussed about stop loss. This is one area that I am struggling to cope up with. Please let me know if there is any rule to fix the stop loss in this strategy or I have to exit whenever the loss is not acceptable to me. I wish there is a rule.

  65. Hi ST, Sorry for asking again the unanswered question..Did you do any trading related to course or you have learnt everything on your own..Thanks

  66. You have some of the better heiken ashi videos out there. A lot of people discount them because they don't accurately show price but if used in the context that you present here as momentum based on the range of the bar, they become very powerful. Thanks for the videos!

  67. Very Nice and Clear Explanation Sir . Hats Off to You…..

  68. Hello Raunak ji, watched Renko series at a stretch. Its excellent and useful. Can you pls share setups you come across?

  69. You are so good in educating and explaining all types of Strategies…. It's unbelievable that I get it for free…. Thank you so much for making it free and I still remember the way you rejected elearning offer…. It's my fortunate to find you, thank you so much, keep doing the good deed ….
    I have question…. You are master in so many Strategies what do you use?

  70. Sir you mentioned that you use Amibroker charting platform. Do you get real time prices ? What platform do you use to actually place your trades

  71. Excellent presentation as always Raunak… 😎👍

  72. sir if stostic ov.bou. zone but hiken canle is nerow but not in blak colur what can we do go for sell or buy? it is below 100 ds mo. avg

  73. Could you please explain the entry, exit and SL in this strategy. Thank You for your all efforts…

  74. Bhai,
    Thanks for the strategy,
    Kindly provide ur mail i.d.
    Also pls make a video on how to ge RS in trading view.I am unable to do that.

  75. Sir, Can its work in binary trading options???

  76. Thanks for the lovely video. Great insight into HA candles. I am a intraday trader in crude oil . Could you please tell me which time frame should I use and should I go for MIS or normal delivery in order to maximize profit. Thanks🙏

  77. can u suggest me good indicators for banknifty and which timeframe works good

  78. u r the best , very simple and clear stategy describing. thank u and god bless u for you work!

  79. Is the relative strength indicator you mention in the video same as RSI indicator?

  80. HI, trade with trend, thank you for this wonderfull lessons youre sharing to us new traders,
    I would like to try this heiken Ashi – Stochastic strategy
    but i have a question regarding the setting for stochastic,,,,,, is this a Full? Fast? or Slow stochastic??? and did you change the setting to make it 15,3,3???
    thank you very much

  81. Here is a scanner i created based on this strategy (suggestions / improvements are welcome 🙂 )
    Its checks:
    NIfty 500 stocks for Green HA candles,
    HA close above 100 SMA, (Heiken Ashi (HA) close different from actual closing price),
    Slow and fast Stochastic indicators below -30

    Relative Strength not included, so check it manually. If you broker doesn't provide RS indicator its available on tradingview

  82. Great sharing & thank you.
    @TradeCan I apply above strategy in cryptocurrency trading?

  83. Excellent explanation Sir… what will be the time frame for Bank NIFTy… Swing Trade….


  85. HI, great video and well explained, keen to use this strategy with paper trades first. one thing that ill ask here, is what should be our target and Stop loss ?

  86. Thank you so much Sir, I am learning a lot 🙂
    I have a question sir can we combine your vwap strategy with Heiken Ashi candle
    Please reply as soon as possible


  88. Hi sir thanks for your good videos on the topic. where can I find rs indicator? is the indicator works in metatrader?

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