Video summary

#1 HEIKEN ASHI Trading Strategy: FOR PROS

Main summary

Key takeaways

Finance

Finance-focused summary (Hikin Ashi / Smooth Hikin Ashi trading approach)

Presenter

  • Ezekiel Chu

Core idea / what problem it targets

  • The approach claims many traders get stopped out due to false signals such as whipsaws and false breakouts.
  • It uses Hikin Ashi to smooth price action and make trend direction clearer, aiming to reduce noise-driven bad entries.

Instruments / tickers / markets mentioned

  • No specific tickers, ETFs, bonds, commodities, sectors, or asset prices were mentioned.

Hikin Ashi calculation / mechanics (as described)

  • Hikin Ashi close = (current candle open + high + low + close) / 4
  • Hikin Ashi open = midpoint of the previous candle open and previous candle close
  • Purpose: smooth “wiggles”/noise to emphasize trend structure.

Candle types (used for signal interpretation)

Bullish Hikin Ashi

  • Green solid body
  • Upper wick present; lower wick small or none
  • Interpreted as uptrend / buyer control

Bearish Hikin Ashi

  • Red candle opposite of bullish
  • Longer lower wick; may/may not have upper wick
  • Interpreted as downtrend / seller control

Doji

  • Small body with long wicks on both sides
  • Interpreted as trend slowing / pause before next move

“Five key signals” / market-state read (as described)

  1. Strong uptrend

    • Series of green candles
    • No lower wicks
    • Candle bodies may get bigger → stronger momentum
    • Caution: implies not a good time to sell into strong buying momentum

  2. Uptrend weakening

    • Green candles get smaller
    • Lower wicks may appear
    • Interpreted as buyers losing strength → potential pause, retracement, or reversal
    • Caution: not a good moment to buy “right now” (wait)

  3. Sideways after an uptrend

    • Multiple doji candles
    • Interpreted as no clear direction
    • Recommendation: wait it out

  4. Strong downtrend

    • Series of red candles
    • No upper wicks
    • Only lower wicks
    • Candle bodies bigger → stronger bearish momentum

  5. Weak downtrend

    • Bearish candles start getting smaller
    • Upper wicks can appear (loss of seller momentum)
    • Interpreted as potential pause or reversal
    • Caution: not a good time to sell while momentum is weakening

Classic vs Smooth Hikin Ashi (and why “smooth” is used)

Disclosed limitation of classic Hikin Ashi

  • It doesn’t show the actual market price as well as standard candlesticks.
  • Can make it harder to identify support/resistance and chart patterns.

“Smooth Hikin Ashi” described

  • Overlays Hikin Ashi on top of the normal candlestick chart (add-on rather than replacement).
  • Benefit: you can see both:
    • the smoothed trend
    • the real price structure for levels/patterns

Important recommendation / caution (anti-late-entry rule)

The creator explicitly cautions that you should not buy immediately when Hikin Ashi color changes red → green, and should not sell immediately when it changes green → red. Reason: color flips often occur after price has already moved, leading to late entries.

4-step strategy framework (explicit step-by-step)

  1. Step 1: Find a strong, clear trend

    • Example given: large red candles = strong downtrend

  2. Step 2: Wait for early signs of a trend change

    • Look for candles shrinking, then a shift to green (for downtrend → uptrend scenario)

  3. Step 3: Wait for a pullback toward the Smooth Hikin Ashi indicator

    • Use the indicator area as an adaptive support/resistance reference
    • Avoid entering at the initial color-change moment

  4. Step 4: Wait for confirmation near the indicator

    • Example confirmation:
      • a red candle with a long lower wick (buyers reject downside)
      • followed by a green engulfing candle
    • Entry: buy after the engulfing confirmation
    • Stop-loss: below the swing low, “slightly below” the candle wick bottom
    • Take-profit: aim at the next rejection level on the same timeframe

Goal/claimed performance intent

  • Framed as pullback trades off trend reversals with high probability.
  • Suggests using higher/lower timeframes (“inter time frame”) to decide how aggressively to trade, though no specific timeframe lengths are provided.

Key numbers

  • No market numbers (prices, yields, multiples, percentages, time targets) were provided.

Disclosures / disclaimers

  • No explicit “not financial advice” disclaimer appears in the provided subtitles.

Sources / presenters

  • Ezekiel Chu

Original video