Heikin-Ashi

Heikin-Ashi is modified candlestick charting technique from Japan, meaning "average bar". By averaging prices, Heikin-Ashi smooths price action, making trends clearer and reducing market noise.

Types

Heikin-Ashi is best used for identifying and following trends. Consecutive same-color candles indicate strong trend; hold positions. When candle color starts changing, may signal trend reversal. Heikin-Ashi filters market noise making trends clearer, but also increases lag. Many traders use Heikin-Ashi alongside traditional candlesticks: HA for trend identification, traditional for precise entry. Heikin-Ashi can also be combined with other indicators like moving averages or RSI.