Blog Post On: 1/1/2010
Heikin-Ashi are Live on MTRIG since 1/1/2010!
We are very please to release a new feature on MTR Investors Group the Heikin-Ashi Technique, developed by Dan Valcu, for creating candlestick charts. Once you start using Heikin-Ashi charts it is hard to use any other type of stock charts.
The heikin-ashi method {heikin means "average" or "balance" in Japanese, while ashi means "foot" or "bar") is a visual technique that eliminates irregularities from a normal chart, offering a better picture of trends and consolidations. Just by looking at a candlestick chart created with this method, you get a snapshot of the market's direction and strength.
Compare the two charts below: PowerShares QQQQ Candlestick Chart vs. a Heikin-Ashi Chart.
The heikin-ashi candlestick technique uses modified open-high-low-close (OHLC) values and displays these as candlesticks. The modified values are computed using these definitions:
haClose = (O+H+L+C)/4
haOpen = (haOpen (previous bar) + haClose (previous bar))/2
haHigh = Maximum(H, haOpen, haClose)
haLow = Minimum(L, haOpen, haClose)
| Scenario |
Trend |
Up Trend |
Down Trend |
| 1 |
Trend is Normal |
Rising green bodies |
Falling red bodies |
| 2 |
Trend gets Stronger |
Rising longer green bodies with no shadows |
Falling longer red bodies with no upper shadows |
| 3 |
Trend gets Weaker |
Candle bodies get smaller. Emergence of lower shadows |
Candle bodies get smaller. Emergence of upper shadows |
| 4 |
Consolidation |
Smaller bodies with both upper and lower shadows |
Smaller bodies with both upper and lower shadows |
| 5 |
Change of Trend |
Very small body with long upper and lower shadows |
Very small body with long upper and lower shadows |
If you have saved your chart settings to Candlestick or another format go to the Charts page and under Chart Settings select Heikin-Ashi as the Chart Type.
