Heikin Ashi candles transform price data to smooth the visual trend. Their displayed open and close are not necessarily prices you could trade. Elliott wave and harmonic classifications rely on labeling rules that can admit multiple interpretations.
Divergence occurs when a price extreme is not matched by an indicator extreme. It can persist while price continues. Use actual tradable prices for entries and risk calculations, record labels before the outcome, and test whether the additional complexity improves decisions.
Worked example
A smoothed candle can remain bullish while a standard candle pulls back. An order entered at the synthetic close may be impossible to reproduce in the market.
Check your understanding
Which prices should a trade execution backtest use?
Show explanation
Actual executable market prices, with realistic spread and slippage, not synthetic candle prices.
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