The Heikin-Ashi technique can be used in conjunction with candlestick charts when trading securities to spot market trends and predict future prices.TechnicalAnalysisAdvancedTechnicalAnalysisConceptsTechnicalAnalysisGuidetoTechnicalAnalysisTechnicalAnalysisBasicEducationAdvancedTechnicalAnalysisConceptsTableofContentsExpandTheHeikin-AshiFormulaConstructingtheChartPuttingIttoUseHeikin-Ashi,alsosometimesspelledHeiken-Ashi,means"averagebar"inJapanese.TheHeikin-Ashitechniquecanbeusedinconjunctionwithcandlestickchartswhentradingsecuritiestospotmarkettrendsandpredictfutureprices. It'susefulformakingcandlestickchartsmorereadableandtrendseasiertoanalyze.Forexample,traderscanuseHeikin-Ashi chartstoknowwhentostayintradeswhileatrendpersists butgetoutwhenthetrendpausesorreverses.Mostprofits aregeneratedwhenmarketsaretrending,sopredictingtrendscorrectlyis necessary.TheHeikin-AshiFormulaNormalcandlestickchartsarecomposedofaseriesofopen-high-low-close(OHLC)candles setapartbyatimeseries.TheHeikin-Ashitechniquesharessomecharacteristicswithstandardcandlestickchartsbutusesamodifiedformulaofclose-open-high-low(COHL):Close=14 (Open+High+Low+Close)(The average price of the current bar)Open=12 (Open of Prev. Bar+Close of Prev. Bar)(The midpoint of the previous bar)High=Max[High, Open, Close]\begin{aligned}&\text{Close}=\frac{1}{4}\text{(Open}+\text{High}+\text{Low}+\text{Close)}\\&\quad(\textit{Theaveragepriceofthecurrentbar})\\&\text{Open}=\frac{1}{2}\text{(OpenofPrev.Bar}+\text{CloseofPrev.Bar})\\&\quad(\textit{Themidpointofthepreviousbar})\\&\text{High}=\text{Max[High,Open,Close}]\\&\text{Low}=\text{Min[Low,Open,Close]}\end{aligned}​Close=41​ (Open+High+Low+Close)(The average price of the current bar)Open=21​ (Open of Prev. Bar+Close of Prev. Bar)(The midpoint of the previous bar)High=Max[High, Open, Close]​1:37Heikin-Ashi:ABetterCandlestickConstructingtheChartTheHeikin-Ashichartisconstructedlikearegularcandlestickchart,excepttheformulaforcalculatingeachbarisdifferent,asshownabove.Th