Heikin-Ashi Technique

The Heikin-Ashi technique uses a formula to modify OG open-high-low-close candlestick charts, making trends in the charts easier to spot. In Japanese, Heikin-Ashi means “average bar,” which makes sense given that the Heikin-Ashi technique formula takes the mean price of the current bar and the midpoint of the preceding bar.

With the Heikin-Ashi technique in action, a quick glance at the candlesticks is all you need to draw some savvy conclusions. For instance, empty candlestick bars mean there’s an upward trend, and filled candlestick bars mean there’s a downward trend. Upper and lower shadows around short candlesticks are the in-between times when trends could be reversing.

Since the Heikin-Ashi technique uses the average, Heikin-Ashi candlestick charts won’t show real-time prices, but they do show trends much more clearly.

Trade off, trade on.