Heikin Ashi candlesticks overview

Heikin Ashi candlesticks gives a smoother appearance by reducing some of the market noise, hence making it easier to spots trends and reversals. There is a tendency with Heikin-Ashi for the candles to stay red during a downtrend and green during an uptrend



Heikin-Ashi calculation uses a formula based on two-period averages




How to read Heikin-Ashi candles

Green candles indicate an uptrend and in case with no lower shadows the move can be assumed a strong uptrend
Red candles indicate a downtrend and if with no higher shadows a strong downtrend


Candles with a small body surrounded by upper and lower shadows indicate a potential trend change or trend pause



the Heikin-Ashi candlesticks do not show the exact open and close prices for a particular time period because they are averaged hence who need to exploit quick price moves may find Heikin-Ashi charts are not responsive enough to be useful


For whom interested with Higher Time Frame Candle presentation on lower time frame chart including Heikin-Ashi candles are invited to check HTF Candles