Maybe some of these explanations from other sites will help. I’d post links but I don’t think I’m allowed to.
The suggestion is that with a change of colour of the Heikin Ashi candle, the trend has changed which I figured sort of fits in with your candle changing colour element on the counter trend strategy
[B]From investopedia[/B]
Constructing the Chart
The Heikin-Ashi chart is constructed like a regular candlestick chart (except with the new values above). The time series is defined by the user–depending on the type of chart desired (daily, hourly, etc.). The down days are represented by filled bars, while the up days are represented by empty bars. Finally, all of the same candlestick patterns apply.
Putting It to Use
These charts can be applied to many markets; however, they are most often used in the equity and commodity markets. Traders often program these new instructions into existing trading programs, such as MetaTrader, or use many online tools (listed in the reference section below). Finally, it can be applied via Microsoft Excel or other similar spreadsheet programs.
There are five primary signals that identify trends and buying opportunities:
* Hollow candles with no lower "shadows" indicate a strong uptrend: let your profits ride!
* Hollow candles signify an uptrend: you might want to add to your long position, and exit short positions.
* One candle with a small body surrounded by upper and lower shadows indicates a trend change: risk-loving traders might buy or sell here, while others will wait for confirmation before going short or long.
* Filled candles indicate a downtrend: you might want to add to your short position, and exit long positions.
* Filled candles with no higher shadows identify a strong downtrend: stay short until there's a change in trend.
These signals show that locating trends or opportunities becomes a lot easier with this system. The trends are not interrupted by false signals as often, and are thus more easily spotted. Furthermore, opportunities to buy during times of consolidation are also apparent.
[B]From Forexoma:[/B]
the Heikin-Ashi chart is delayed and the candlestick chart is much faster and helps us to make more profit. So why should we use a Heikin-Ashi chart? As I have already explained, because of the delay that the Heikin-Ashi chart has, it has less number of false signals and prevent us from trading against the market. On the other hand, Heikin-Ashi candles are easier to read because in contrast with the candlesticks they don�t have a lot of different shapes and formations.
Different candles in a Heikin-Ashi chart:
1- Bullish candles:
When the market is Bullish, Heikin-Ashi candles have big bodies and long upper shadows but no lower shadow. Look at the big uptrend in the below chart. As you see almost all of the candles have big bodies, long upper shadows and no lower shadow.
2- Bearish candles:
When the market is Bearish, Heikin-Ashi candles have big bodies and long lower shadows but no upper shadow. Look at the big downtrend in the below chart. As you see almost all of the candles have big bodies, long lower shadows and no upper shadow.
3- Reversal candles:
Reversal candles in the Heikin-Ashi charts look like Doji candlesticks. They have no or very small bodies but long upper and lower shadows.
How can you use the Heikin-Ashi chart in your trades?
I know that some traders only use Heikin-Ashi to trade but I don�t agree with it. As you saw Heikin-Ashi is delayed. So it is good for trading volatile currency pairs like GBP-JPY and with small time frames. It is good for intraday trading and scalping using small time frames like 5 minutes or 2 minutes. It is not suitable for big time frames like daily and 4 hours because you will be too late in many cases and so you have to close your trade before you make any profit.