{"id":9664,"date":"2022-10-12T19:22:44","date_gmt":"2022-10-12T19:22:44","guid":{"rendered":"https:\/\/mdr.foobrdigital.com\/?p=9664"},"modified":"2022-10-12T19:22:44","modified_gmt":"2022-10-12T19:22:44","slug":"how-to-use-a-heikin-ashi-chart","status":"publish","type":"post","link":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/2022\/10\/12\/how-to-use-a-heikin-ashi-chart\/","title":{"rendered":"How to Use a Heikin Ashi Chart"},"content":{"rendered":"\n<p>How do you use Heikin Ashi?<\/p>\n\n\n\n<p>Now that you\u2019ve learned how to calculate Heikin Ashi candlesticks, let\u2019s discuss&nbsp;<strong>how to use and read a Heikin Ashi candlestick chart<\/strong>.<\/p>\n\n\n\n<p>The idea behind using a Heikin Ashi chart is that it&nbsp;<strong>filters market noise<\/strong>.<\/p>\n\n\n\n<p>And since noise is filtered, you basically see the&nbsp;<strong>naked trend<\/strong>.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/bpcdn.co\/images\/2020\/04\/18164854\/heikin-ashi-reduces-market-noise-780x251.png\" alt=\"Heikin Ashi reduces market noise\" class=\"wp-image-174173\"\/><\/figure>\n\n\n\n<p>Because the Heikin Ashi candlesticks are calculated based on&nbsp;<strong>averages<\/strong>, the candlesticks will have smaller shadows (wicks) than a regular Japanese candlestick.<\/p>\n\n\n\n<p>Just like with regular Japanese candlesticks, with a Heikin Ashi candlestick, the smaller (or shorter) the shadow (or wick), the stronger the trend.<\/p>\n\n\n\n<p><strong>Green candle<\/strong>s with no lower shadow signal a strong UPTREND.<\/p>\n\n\n\n<p><strong>Red candles<\/strong>&nbsp;with no upper shadow signal a strong DOWNTREND.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><a href=\"https:\/\/bpcdn.co\/images\/2020\/04\/18175003\/heikin-ashi-chart-uptrend-and-downtrend-example.png\"><img decoding=\"async\" src=\"https:\/\/bpcdn.co\/images\/2020\/04\/18175003\/heikin-ashi-chart-uptrend-and-downtrend-example-780x442.png\" alt=\"Heikin Ashi Showing Uptrend and Downtrend\" class=\"wp-image-174188\"\/><\/a><\/figure>\n\n\n\n<p>Heikin Ashi charts are used by technical traders to IDENTIFY:<\/p>\n\n\n\n<ul><li>Trend DIRECTION<\/li><li>Trend STRENGTH<\/li><\/ul>\n\n\n\n<p>So If your goal is to catch trends and ride them as long as possible, then you may want to learn how to use a Heikin Ashi chart.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How to Use Heikin Ashi to Identify Trend Direction<\/h2>\n\n\n\n<p>A Heikin Ashi chart shows you the direction of a trend&nbsp;<strong>through its color-coded candles<\/strong>.<\/p>\n\n\n\n<p>A green candle is telling you that trend is UP.&nbsp;A red candle is telling you that the trend is DOWN.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><a href=\"https:\/\/bpcdn.co\/images\/2020\/04\/18180234\/heikin-ashi-trend-direction.png\"><img decoding=\"async\" src=\"https:\/\/bpcdn.co\/images\/2020\/04\/18180234\/heikin-ashi-trend-direction-780x442.png\" alt=\"Use Heikin Ashi to identify trend direction\" class=\"wp-image-174189\"\/><\/a><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">How to Use Heikin Ashi to Identify Trend Strength<\/h2>\n\n\n\n<p>A\u00a0Heikin Ashi chart\u00a0shows you the strength of the trend by\u00a0<strong>observing the shadows (or wicks)<\/strong>.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><a href=\"https:\/\/bpcdn.co\/images\/2020\/04\/18181031\/heikin-ashi-trend-strength.png\"><img decoding=\"async\" src=\"https:\/\/bpcdn.co\/images\/2020\/04\/18181031\/heikin-ashi-trend-strength-780x442.png\" alt=\"Use Heikin Ashi to determine trend strength\" class=\"wp-image-174192\"\/><\/a><\/figure>\n\n\n\n<p>You\u2019ll notice that for many of the green candles,<strong>&nbsp;there is no lower shadow<\/strong>&nbsp;or wick.<\/p>\n\n\n\n<p>Vice versa for the red candles. Most&nbsp;<strong>do not have any upper shadows<\/strong>&nbsp;or wicks.<\/p>\n\n\n\n<p>These candlesticks do not show a shadow in the&nbsp;<em>OPPOSITE&nbsp;<\/em>direction of the trend.<\/p>\n\n\n\n<p><strong>When there is no shadow, this means you\u2019re in a strong trend<\/strong>.<\/p>\n\n\n\n<p>So the main thing you want to look for on a Heikin Ashi chart to determine trend strength is&nbsp;<strong>shadowless or wickless candlesticks opposite the trend.<\/strong><\/p>\n\n\n\n<p>Candlesticks that have no shadow or wick on one end are also called \u201c<strong>shaved candles<\/strong>\u201c.<\/p>\n\n\n\n<p>Depending on which end lacks a shadow, there\u2019s a name for each type of shaved candle.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter\"><img decoding=\"async\" src=\"https:\/\/bpcdn.co\/images\/2020\/04\/18192134\/shaved-bottom-and-shaved-head-607x780.png\" alt=\"Shaved Bottom and Shaved Head Candlesticks\" class=\"wp-image-174199\"\/><\/figure>\n\n\n\n<p>If there is no lower shadow\/wick, also known as having \u201cno tail\u201d, the candle is called a \u201c<strong>shaved bottom<\/strong>\u201c.<\/p>\n\n\n\n<p>\u201c<strong>Shaved butt<\/strong>\u201d would\u2019ve been a better name in our opinion.&nbsp;?<\/p>\n\n\n\n<p>If there is no upper shadow\/wick, also known as having \u201cno head\u201d, the candle is called a \u201c<strong>shaved head<\/strong>\u201c.<\/p>\n\n\n\n<p>Technically, the color of the candle does NOT matter, as long a candle lacks a tail or head, but for the purposes of\u00a0Heikin Ashi, we want to see\u00a0<strong>shaved bottoms that are green<\/strong>\u00a0and\u00a0<strong>shaved heads that are red<\/strong>\u00a0since we\u2019re looking for trend strength.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>How do you use Heikin Ashi? Now that you\u2019ve learned how to calculate Heikin Ashi candlesticks, let\u2019s discuss&nbsp;how to use and read a Heikin Ashi candlestick chart. The idea behind using a Heikin Ashi chart is that it&nbsp;filters market noise. And since noise is filtered, you basically see the&nbsp;naked trend. Because the Heikin Ashi candlesticks [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[769],"tags":[],"_links":{"self":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/9664"}],"collection":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/comments?post=9664"}],"version-history":[{"count":0,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/9664\/revisions"}],"wp:attachment":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/media?parent=9664"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/categories?post=9664"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/tags?post=9664"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}