What is Heikin-Ashi indicator?

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Heikin-Ashi indicator is an application that has gained in popularity recently after being relatively unknown. It was developed a few decades ago to improve upon the interpretation of Candlestick formations, which have been studied for centuries starting with rice merchants in Japan in the 1700s. Heikin-Ashi indicator takes the basic candlestick information, the open, close, high, and low, and then “smoothes” the erratic portions of the chart in much the same fashion as would a moving average. Traders make a better-informed decision without the distractions caused by volatile price action. By using Heikin-Ashi indicator you will be able to unleash your trading expertise in a significant level. Surely this will add an extra ease for your successful trading.

Heikin-Ashi indicator for metatrader

Heikin-Ashi indicator is an offshoot from Japanese candlesticks. Heikin-Ashi indicator uses the open-close data from the prior period and the open-high-low-close data from the current period to create a combo candlestick. The resulting candlestick filters out some noise in an effort to better capture the trend. In Japanese, Heikin means “average” and “ashi” means “pace” (EUDict.com). Taken together, Heikin-Ashi represents the average-pace of prices. Heikin-Ashi indicator is not used like normal candlesticks. Dozens of bullish or bearish reversal patterns consisting of 1-3 candlesticks are not to be found. Instead, these candlesticks can be used to identify trending periods, potential reversal points and classic technical analysis patterns.

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