Heikin Ashi

TradingKey19 hours ago

Heikin Ashi is a charting technique that displays price data similarly to a traditional Japanese candlestick chart. However, the way the candlesticks are calculated and plotted is different. This method uses average ranges to establish the candle points, resulting in a smoother chart that provides a clearer view of market trends. Unlike standard Japanese candlestick charts, Heikin Ashi takes into account the previous session's open and close prices for its calculations, effectively removing gaps between the bars on the chart. This approach is useful for filtering out market noise.

In a Heikin Ashi chart, down days are represented by red bars, while up days are indicated by green bars.

When trading with Heikin Ashi, hollow candles represent an uptrend, with larger hollow bars signifying a stronger upward movement. In contrast, filled candles indicate a downtrend, with larger filled bars reflecting a more significant downward trend.

To calculate Heikin Ashi values:

Open = (Open of previous bar + Close of previous bar) / 2
High = the highest value among High, Open, or Close
Low = the lowest value among Low, Open, or Close
Close = (Open + High + Low + Close) / 4

Disclaimer: The content of this article solely represents the author's personal opinions and does not reflect the official stance of Tradingkey. It should not be considered as investment advice. The article is intended for reference purposes only, and readers should not base any investment decisions solely on its content. Tradingkey bears no responsibility for any trading outcomes resulting from reliance on this article. Furthermore, Tradingkey cannot guarantee the accuracy of the article's content. Before making any investment decisions, it is advisable to consult an independent financial advisor to fully understand the associated risks.

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