Can you judge a trend of any particular stock in in a matter of seconds? Well, there is one indicator that allows you to do exactly that. In a matter of seconds you can know the trend of an instrument. It is possible with a candle-stick known as Heikin Ashi.
To those who are interested in technical meaning, here is how the candle stick is computed –
- Open price: the open price in a Heikin-Ashi candlestick is the average of the open and close of the previous candlestick.
- Close price: the close price in a Heikin-Ashi candlestick is the average of open, close, high and low prices.
- High price: the high price in a Heikin-Ashi candlestick is chosen from one of the high, open and close price of which has the highest value.
- Low price: the low price in a Heikin-Ashi candlestick is chosen from one of the low, open and close price of which has the lowest value.
To those who just want to know what the candle stick is, refer to the below image –
What do we learn from the above image –
- When a trend is strong you will see only one tail (it can be on either side)
- The moment you see tail on both sides, get ready. The trend is about to change
- After the trend is changed, enter the stock (Buy or Sell) and keep on holding it till the time you see both the tails.
See, was it difficult?