What is "Heikin Ashi"?
“Heikin Ashi” is a charting technique used to display prices that, at a glance, looks similar to a traditional Japanese candlestick chart.
Studying Heikin Ashi
The Heikin-Ashi Formula
Normal candlestick charts are composed of a series of open-high-low-close (OHLC) candles set apart by a time series. The Heikin-Ashi technique shares some characteristics with standard candlestick charts but uses a modified formula of close-open-high-low (COHL):
How to Trade Heikin Ashi
Hollow candles represent an uptrend, with larger hollow bars indicating a stronger uptrend.
Filled candles represent a downtrend, with larger filled bars indicating a stronger downtrend.
The Heikin Ashi chart is plotted as a candlestick chart, where the down days are represented by red bars, while the up days are represented by green bars.