Description
Heikin Ashi candlesticks are a type of Japanese candlestick charting technique used to analyze financial markets. Heikin Ashi candlesticks are similar to traditional Japanese candlesticks, but differ in the calculation of the candlestick's open, high, low and close values. Heikin Ashi charts have the same shape as regular candlesticks, but the data used to construct the candles is different.
This candlesticks are said to be smoother than traditional candlesticks because they are calculated using the average of the open, close, high and low prices of the previous and current periods. This means that Heikin Ashi candles filter out some of the “noise” in the chart, making it easier to identify trends.
Heikin Ashi candlesticks are made up of four distinct parts: the body, the upper shadow, the lower shadow and the wicks. The body of the candle is the area between the open and close. The upper shadow is the highest point of the candle and the lower shadow is the lowest point of the candle. The wicks are the thin lines that extend from the body of the candle to the upper and lower shadows.
The candles can be used to identify support and resistance levels and trends in a market. Heikin Ashi candles can also be used to identify potential reversal points. Trend traders often use Heikin Ashi candles to identify potential entry and exit points.
Heikin Ashi candles are easier to read than traditional candlesticks because they are calculated using the average of the open, close, high and low prices. Heikin Ashi candles also filter out some of the noise in a chart, making it easier to identify trends.
This candles can be used in any timeframe, but they are most often used in longer-term charts such as daily and weekly charts. Heikin Ashi candles can be used in any market, but they are most often used in Forex, stocks, commodities and indices.
Heikin Ashi candles can also be used in combination with other technical indicators and chart patterns to help identify potential trading opportunities. Heikin Ashi candles can also be used to confirm a trend, identify potential reversal points and identify support and resistance levels.
In conclusion, Heikin Ashi candles are a type of Japanese candlestick charting technique used to analyze financial markets. Heikin Ashi candles differ from traditional Japanese candlesticks in the way that they are calculated. Heikin Ashi candles are said to be smoother than traditional candlesticks because they are filtered to reduce the “noise” in the chart. Trend traders often use Heikin Ashi candles to identify potential entry and exit points. Heikin Ashi candles can be used in any timeframe and any market, and are often used in combination with other technical indicators and chart patterns.