The close price is the other interesting aspect of the Heikin Ashi candlestick anatomy. One of the main reasons these charts looks so neat and orderly is the way the open price is being printed. If you look at the formula carefully, it makes each new Heikin Ashi candle open in the middle of the previous candle’s body’s range. The open price is derived from the previous candle’s open and close prices. It’s the way open and close prices are calculated that gives this filtering effect. You can see, when you compare the two charts together, how the Heikin Ashi chart helps filter out those counter trend movements and keep the dominant trend in display. When the open price syncs up with the high or low, you know you you’ve got some good market momentum. What you will find in strong bullish conditions is that the open and low price are the same, and during bearish momentum, the open and high price are equal. The Heikin Ashi candle will just show the highest and lowest data point achieved while it was active. To summarize, the high and low prices are nothing special. Open price = previous candle (open + close) / 2.Close Price = (open + high + low + close) / 4.Low Price = lowest price out of the current candles’s low, open, or close price.High Price = highest price out of the current candle’s high, open, or close price.Heikin Ashi candles have the same 4 data points, but they each have some unique math behind them – which is important to understand if you’re going to use them. These figures are taken directly from the raw price action. The classic candlestick we’re all used to has a high, low, open, and close price. It is this chaining effect that gives a really unique view into the market. Heikin Ashi candlesticks requires data from the previous HA candle, meaning they essentially build off one another. The ‘formula’ for their construction is designed to creates a ‘smoothing’ effect – filtering out the irrelevant moves, while maintaining the display of the dominant price action. This is achieved through the way the Heikin Ashi charts are built through the equation. One main goal of Heikin Ashi candlesticks is to eliminate noise on the chart. They are the result of applying some average math directly to the candlestick structure. Translated from Japanese, Heikin Ashi means ‘average bar’ and you will see why. In this guide, I am going to walk you through how Heikin Ashi charts work, and how these customized candlesticks can give you a different unique perspective and perhaps change the way perform your chart analysis…
![forex expert advisor generator heiken ashi smoothed forex expert advisor generator heiken ashi smoothed](http://forexswingprofit.com/wp-content/uploads/2011/05/heiken.gif)
These bad boys can be used with any market on any time frame. They are a lesser known customized form of price action – but building in popularity, providing traders a new insight into technical analysis.
Forex expert advisor generator heiken ashi smoothed full#
I’ve been a fan of these modified candlesticks for most of my trading career, but I feel they are rarely spoken about or used to their full potential. Heikin Ashi candlesticks are another clever invention from the minds of great Japanese traders. Heikin Ashi candlesticks may be of interest to you, they can help with: trend analysis, pinpointing key reversals, and enhancing your exit strategy. Maybe you’re having trouble spotting the main trend, or market reversals? Have you ever been riding a trend, then been spooked out of a position because it seemed like price was going to turn against you – only to see the trend continue another 300 pips?