فوركس ساتو

TRADING TECHNIQUESdifferent colors to differentiate
descending and
ascending trends. For
each chart I'll discuss
how this technique can
be used to either enter
and stay on the right side
of the trend, or avoid trading
during periods of consolidations.
Standard & Poor's 500
(SP500-HA):
Figure 3 offers no doubt
about the usefulness of
this method, even for a
novice: All trends are visible,
with short consolidations
marked as (4) occurring in February and July. Strong
rising trends (2) were marked by long white candle bodies with
no lower shadows, while strong falling trends (2) were accompanied
by filled candle bodies with no upper shadows.
Using the observations in Figure 2, note how the smaller
bodies (3) in January 2003 warned about a weakening of the
trend, and subsequently, a reversal (4). Trend changes (5) were
pointed out by small bodies with longer shadows, but as an
exception, the reversal in March occurred without any such
sign. Although a rising trend, the segment AB was composed.
of several short sections (normal trend, weakening, consolidation).
It could also be seen as a normal ascending trend (1) due
to a majority of white bodies.forex sato
(The heikin-ashi is a visual technique
that eliminates irregularities from a
normal chart, offering a better picture
of trends and consolidations.)forex sato

Gold (XGLD-HA):
- 37.0
- 36.5
- 360
- 35.5
- 35.0
- 34.5
- 34.0
j - 33.5
г 33.0
г 32.5
h 32.0
- 31.5
- 31.0
- 30.5
30.0
29.5
29.0
FIGURE 5: MODIFIED CHART OF PFIZER. In an uptrend or downtrend, Pfizer displays several small consolidation periods marked by the presence
of small bodies with upper and lower shadows.
24 • February 2004 • Technical Analysis of STOCKS & COMMODITIES
Another example of the simplicity gained by using modified
heikin-ashi values is in the chart of gold prices in Figure 4. A
longer rising trend (April-May) was dominated by white candles
(1) and (2) with a small consolidation (4) toward the end of April.
The very small body in May was just a pause before the next leg
up; most of the candles were white bodies with no lower
shadows. The smaller bodies toward the end of May announced
either a weakening of the trend (3) or the start of a consolidation
period (4). The consolidation in May-June was well defined.forex sato
(small bodies with both long upper and lower shadows). In
August, there was another consolidation (4). Given the presence
of an ascending triangle, there was a very good chance that
price would break out of this short consolidation.
Pfizer (PFE-HA):
If you have been trading Pfizer (PFE), you should be familiar
with its behavior, which is highlighted in both charts in Figure
5: many small consolidations on the way both up and down.
Gaps are not shown on the modified chart, which makes it easier
to read. The small body with long upper and lower shadows (5)
confirms a change of trend in April. As shown on the daily chart,
the longer trends are not continuous (as in the previous examples),
but interrupted by small consolidations. In this case, it
would be worthwhile to analyze weekly charts.
HEIKIN-ASHI AND SIMPLE INDICATORS
From a visual standpoint, the heikin-ashi technique is based on
the effect of the size and color of the candle bodies. For
additional confirmation, many traders use indicators, so to
make life easier I defined two simple indicators: haOpen and
haClose. I applied these to the chart of Ultimate Software
Group (ULTI). See the second sidebar, "Defining Simple
Indicators Based On Modified OHLC Values," for details on
these indicators. You can see them in a separate window in
 forex sato