Heikin-Ashi charts, bless their souls, are a kind of candlestick chart used in the art of technical analysis to divine the trends of the market and forecast its future movements. They come from the land of the rising sun, where they are known as “average bars” or, in their native tongue, Heikin-Ashi.
Now, these charts aren’t like the ones we’re used to, oh no. Traditional candlestick charts reflect the opening, closing, high, and low prices of a particular time period. But Heikin-Ashi charts, well, they use a different formula altogether. You see, the opening price of each Heikin-Ashi candlestick is calculated as the average of the previous candle’s opening and closing prices, while the closing price is the average of the opening, closing, high, and low prices of the current period.
The beauty of Heikin-Ashi charts lies in their ability to filter out the noise in the price movements and give us a clearer view of the trend. Their gentle curves show us the way, and we can use them to pinpoint the support and resistance levels, as well as spot the buy and sell signals. These charts can be used for any market, be it stocks, currencies, or commodities, and they are a true boon to traders and investors alike.
Remember all videos and information on this site is only for educational purposes and is not intended as investment advice.
Here is an excellent video explaining the concept of Heikin-Ashi charts.
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