Binary options Heiken Ashi strategy

The Heiken Ashi strategy for binary options involves using Heiken Ashi candlestick charts to identify market trends and potential reversal points. This technique is popular among traders for its ability to filter out minor price fluctuations and highlight the underlying trend more clearly than traditional candlestick charts. Here’s an in-depth look at how it works, with examples and tips for effective trading.

Understanding Heiken Ashi

What It Is: Heiken Ashi means “average bar” in Japanese. This charting technique modifies the traditional candlestick patterns to create a smoother, easier-to-read representation of price movement. It achieves this by averaging price values.

How It’s Calculated:

  • Open: The average of the open and close of the previous candle.
  • Close: The average of the open, close, high, and low of the current period.
  • High: The maximum of the current high, open, or close.
  • Low: The minimum of the current low, open, or close.

Trading with Heiken Ashi

Trend Identification

  • Uptrend: Indicated by a series of blue or green candles, showing that the asset is moving upwards.
  • Downtrend: Represented by a series of red or pink candles, signaling that the asset is trending downward.

Reversal Signals

  • Bullish Reversal: A change from red to blue/green candles, often after a series of wicks indicating selling pressure exhaustion.
  • Bearish Reversal: A transition from blue/green to red candles, typically following wicks that suggest buying pressure is tapering off.


  1. Spotting a Downtrend: If you observe a shift from blue to red Heiken Ashi candles alongside increasing candle sizes, it indicates a strong bearish trend. In binary options, this could be a signal to enter a “put” option.
  2. Identifying an Uptrend: A change from red to blue candles, especially if the subsequent candles grow in size without significant lower wicks, suggests a robust bullish trend. This would be an opportunity to enter a “call” option.

How to trade binary options with the Heiken Ashi strategy

Trading binary options with the Heiken Ashi strategy involves a methodical approach to identify and act on trends suggested by Heiken Ashi candlesticks. Here’s a step-by-step guide to applying this strategy effectively:

Step 1: Set Up Your Chart

  • Choose an Asset: Select the asset you want to trade.
  • Apply Heiken Ashi: Switch your chart from traditional candlesticks to Heiken Ashi. This can usually be done from the chart settings in your trading platform.
  • Set Time Frame: Depending on your trading style, choose an appropriate time frame. Short-term traders might prefer 1-minute to 15-minute charts, while longer-term traders might look at hourly charts or above.

Step 2: Understand Heiken Ashi Candlesticks

  • Blue/Green Candles: Indicate an uptrend.
  • Red/Pink Candles: Suggest a downtrend.
  • Candles Without Wicks: Strong trend in the direction of the candle color.
  • Candles With Small Bodies and Long Wicks: Potential reversal or weakening trend.

Step 3: Identify the Trend

  • Look for a series of blue or green Heiken Ashi candles for a bullish trend.
  • A sequence of red or pink candles signifies a bearish trend.
  • Confirm the trend strength by the size of the candles and the absence of wicks against the trend direction.

Step 4: Wait for a Reversal Signal (Optional)

  • For a bullish entry, wait until you see a red candle followed by a blue/green candle, suggesting a potential reversal to an uptrend.
  • For a bearish entry, look for a blue/green candle followed by a red candle, indicating a possible downtrend initiation.

Step 5: Enter Your Trade

  • For an Uptrend: Once you have identified a strong bullish trend or a bullish reversal, enter a “call” option with an expiry time that matches your analysis (short-term or long-term based on the candlestick time frames you are observing).
  • For a Downtrend: If you’ve identified a strong bearish trend or a bearish reversal, place a “put” option, again aligning the expiry time with your analysis.

Step 6: Set a Risk Management Strategy

  • Determine your investment amount per trade based on a percentage of your total capital to manage risk effectively.
  • Decide in advance the maximum number of trades you will make if the first one or two do not go as expected.

Step 7: Monitor the Trade and Adjust

  • After entering a trade, monitor other technical indicators and the overall market sentiment to see if the trend continues as expected.
  • Be prepared to adjust your strategy based on new Heiken Ashi candlestick formations and market conditions.

Tips for Trading with Heiken Ashi:

  • Combine With Other Indicators: Use other indicators like the RSI, MACD, or moving averages for confirmation of trends and reversal signals.
  • Practice on a Demo Account: Before applying the strategy with real money, practice on a demo account to get familiar with Heiken Ashi candlesticks and refine your strategy.
  • Be Patient: Heiken Ashi candlesticks can help you see the trend more clearly, but it’s crucial to wait for strong signals before entering a trade.
  • Stay Updated: Keep an eye on market news and events that could affect the asset’s price to complement your technical analysis.

By following these steps and maintaining discipline in your trading and risk management, you can use the Heiken Ashi strategy to potentially improve your binary options trading results.


The Heiken Ashi strategy offers binary options traders a compelling way to gauge market sentiment and identify trends and reversals. By smoothing out price action, it helps in making more informed decisions, reducing the likelihood of getting caught in minor fluctuations. Combining Heiken Ashi with other technical analysis tools can further enhance trading accuracy and success.

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