Heikin-Ashi | Technical Indicators

Understanding the Heikin-Ashi chart β†’

Hey there!

Today we’ll be talking about Heikin-Ashi charts, a simplified way of identifying and analyzing trends.

The Heikin-Ashi technique is used in conjunction with candlesticks to identify and analyze trends. Looking very similar to a candlestick chart, a Heikin-Ashi chart is made up of Heikin-Ashi bars, that are each calculated as an average of past price movement.

There are mainly 4 types of Heikin-Ashi bars, both on the bullish and bearish, and look like the following πŸ‘‡πŸΌ

But, weren’t candlesticks simple enough to understand?

Though the candlesticks theory is reliable and simple, there exist over 50 signals, and analyzingΒ candlesticks can be tedious. Heikin-Ashi charts solve this problem by giving a simpler and smoother chart.

Candlestick Chart of Nifty50

Heikin-Ashi Chart of Nifty50

Giving limited signals, Heikin-Ashi charts allow for a sharper assessment of the trend, filtering out all the market noise.

Note, however, that because Heikin-Ashi is a modified candle, its opening and closing prices would not be the same as a regular candle. There are no gaps seen on a Heikin-Ashi chart as well.

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Learn the unique features of Heikin-Ashi charts and how to use them for trades in the Heikin-Ashi Trading Course from Mr. Dinesh Nagpal, a full-time derivatives trader with a market experience of 15+ years. Β 

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None of the above stock ideas are intended as recommendations. Please consult a registered advisor before buying/selling.

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