Heiken Ashi Smoothed is a versatile and straightforward MT4 indicator that has proven to be a reliable tool for traders interested in trend-based strategies. Unlike standard candlestick charts, this indicator provides a smoothed version, aiming to filter out market noise and offer a clearer view of the market trend. This article provides a comprehensive understanding of the Heiken Ashi Smoothed MT4 Indicator, its components, benefits, and best practices.
Overview of Heiken Ashi Smoothed
The Heiken Ashi Smoothed indicator is an enhanced version of the traditional Heiken Ashi, a well-known tool among traders for its ability to illustrate trend direction with relative ease. The smoothed version incorporates Moving Averages into the mix, providing an additional layer of analysis. The purpose is to fine-tune the representation of price movements, thus offering more precise entry and exit points.
Components of the Indicator
Bearish and Bullish Bars
The fundamental building blocks of this indicator are its bars, colored red and green to represent bearish and bullish trends, respectively.
- Red Bars: These suggest that the trend is bearish, and selling pressure is dominating.
- Green Bars: These indicate that the trend is bullish, with buying pressure in control.
Moving Averages
The Moving Averages are the heart of the Heiken Ashi Smoothed indicator. By overlaying them on the traditional Heiken Ashi bars, they filter out false signals and add a level of refinement.
Color Transition: Indicative of Trend Change
One of the unique features of the Heiken Ashi Smoothed indicator is its ability to change colors when a trend shift is in progress. For example, if a sequence of green bars is followed by a red bar, this may signify a potential bearish reversal, offering traders an opportunity to adjust their positions accordingly.
Benefits of Heiken Ashi Smoothed Indicator
Reduced Market Noise
One of the most appealing features is its capability to filter out market noise. The traditional Heiken Ashi bars alone can sometimes yield false signals due to market volatility, but the additional Moving Averages mitigate this issue.
Enhanced Entry and Exit Points
By incorporating Moving Averages, the indicator provides more accurate entry and exit points, a feature particularly useful for traders implementing trend-following strategies.
Simplified Visuals
The color-coded bars make it incredibly easy to identify the current market trend at a glance, enabling quick decision-making.
Best Practices for Using the Indicator
Combine with Other Indicators
Although Heiken Ashi Smoothed is powerful, it’s best used in conjunction with other MT4 indicators, such as RSI or MACD, to validate its signals.
Adjust Settings
Depending on your trading strategy, you may need to adjust the Moving Averages’ method and period settings to better match the market conditions you’re operating in.
Risk Management
Regardless of how confident you are in the signals generated by this indicator, never neglect the basics of risk management. Use stop-loss orders to protect against unexpected market movements.
Conclusion
The Heiken Ashi Smoothed MT4 Indicator offers a unique blend of simplicity and effectiveness for traders focused on trend-based strategies. While the traditional Heiken Ashi indicator provides a good starting point, the smoothed version takes it a step further by offering refined entry and exit points, reducing market noise, and providing an easier-to-read visual representation of market trends. Combining these features with other technical analysis tools and robust risk management practices will enable traders to maximize the benefits of this innovative indicator.
Features of Heiken Ashi Smoothed MT4 indicator
- Platform: Metatrader 4
- Ability to change settings: Yes
- Timeframe: any from 1 Minute to Daily
- Currency pairs: any
In heiken-ashi-smoothed.zip file you will find:
- heiken-ashi-smoothed.ex4
Download Heiken Ashi Smoothed MT4 indicator for free:
