Haken Ashi Bollinger Channel Trading Strategy

Published: 5 December 2018 Updated: April 21, 2023

Bollinger Bands (Bollinger Waves) is a legendary indicator, which is one of the top 5 most popular technical analysis tools. In this article we will look at binary options strategywhich is based on this indicator.

At first glance, everything seems trivial. But there is a subtle point here. The Bollinger Bands are superimposed not on the usual chart "Japanese candles", and on Heiken Ashi. This allows to receive more accurate signals. The trader literally tracks the waves of market movement without wasting attention on insignificant price fluctuations.

Review of indicators and strategy

To begin with, we should get acquainted with Heiken Ashi - what it is and what is its advantage for trading. This is the name of a special mode of construction of price formations. At first glance, they do not differ much from the usual "Japanese candlesticks". The elements also have a "body" and two "shadows". However, if you look closely, you can detect the presence of bias. Each Heiken Ashi candlestick begins its construction from the middle of the previous element. In the case of candlesticks, each element is built from the closing point of the previous one (its edge). The visual difference is obvious, so it is easy to guess that we are talking about the presence of averaging.

Like the "Japanese candlesticks", Heiken Ashi has 4 points - opening, closing, maximum and minimum. But the calculation is carried out according to a different scheme. Let's consider this point in more detail.

  • Open - is calculated by the following formula: The "opening" and "closing" of the previous bar are divided in half.
  • Close - "opening", "closing", "maximum" and "minimum" is divided by 4.
  • High - the maximum price for the period, regardless of time. It can be both the opening and closing point, so the fluctuation occurred somewhere in the middle of time. This is the difference from the "Japanese candlesticks".
  • Low - minimum price for the period. The scheme is the same as for the High parameter.

What is the advantage of this type of chart? Traders who prefer this approach Price Action (market analysis without indicators) find it more convenient. The point is that the graph becomes smooth and wave-like. Moreover, key price fluctuations are not cut. Only price noise is left without attention, which will not affect the final result of the deal. Haken Ashi is ideal for trading on the "tidal waves". Especially in combination with the Bollinger Bands indicator.


Setting up the chart and the trading platform

Standard trading platforms, including PocketOption, do not support the desired schedule mode. Therefore, it is necessary to use the auxiliary service from TradingView. It will be necessary to open charts of one asset in two tabs - for market analysis and trading.

Step-by-step instructions on how to set it up:

  • Open "Live-charts" on the TradingView website and the trading platform from Poket Options (https://pocketoption.com).
  • In both tabs, select one asset with the highest profits - from 75% and higher up to 89%. On the PocketOption tab, we select the candlestick mode with an interval of 1 minute, and on the Live Chart - Haken Ashi (see screenshot above) with a similar timeframe.
  • We add the "Bollinger Bands" indicator from the catalog of built-in instruments (not custom ones, because there will be all kinds of its modifications, and we need the original version) to the platform for the analysis.


Trading signals by strategy

The combination of tools used forms the optimal conditions for the analysis of price waves. The trader's task is to recognize when the previous movement stops and a reversal begins. It is important to differentiate a false correction from a true trend reversal.

Signals to enter the market:

  • On the downgrade - the price comes to the upper limit of the Bollinger Band, touches it or breaks through it, and then reflects from it and returns again to the channel. After that, the Heiken Ashi candle in red must overcome the middle curve in the channel. After closing the bar in the lower half of the channel opens a deal "down".
  • On the rise - there is a similar reflection of the price, but from the lower boundary of the Bollinger wave. The signal is confirmed by the breakdown of the upward candle of the middle boundary.

The key point is the point of intersection of the median Moving AverageThe market is not allowed to enter the market until this boundary is penetrated. Until this boundary is penetrated, it is impossible to enter the market.

Expiration time - about 5 bars, this is the optimal choice. This interval allows you to make a profit, overcoming the short-term correction, possible in the first 1-2 candles after the signal. The last picture shows the same fragment of the chart as above, but already in the trading terminal.

In conclusion, let's note that when trading on the strategy, you should not forget about the rules of money management. Therefore, the maximum amount of investment in a trading contract should be limited to 5% of the deposit.

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