Heikin-Ashi candlestick chart

    By
    Andrey Orlov
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    What is a Heikin-Ashi chart?

    Heikin-Ashi (平均足, Japanese, literally “average bar”) candlesticks are an OHLC chart. It represents the price action in a similar way to Japanese candlesticks, which are the most popular type of chart.

    The candlesticks are defined in the following way:

    • Open = (open of previous bar + close of previous bar)/2
    • Close = (open + high + low + close)/4
    • High = maximum of high, open, or close (whichever is highest)
    • Low = minimum of low, open, or close (whichever is lowest)

     

    Heikin-Ashi candlesticks must be used with caution with regards to the price as the body does not necessarily sync up with the actual open and close prices of the period.

    Depending on the settings of the trading software, Heikin-Ashi charts are used instead of another chart type, or plotted as an indicator in a separate window, or used as an overlay over a regular chart.

    We recommend that you use Heikin-Ashi charts with caution. New traders should focus on the Japanese candlestick charts:

    Japanese candlesticks — the only chart type you need