Heikin Ashi is a charting technique that can be used to predict future price movements. It is similar to traditional candlestick charts.SearchChartMarketsNewsScreenersCommunityMoreGetstartedHelpCenter•Chart•I'dliketolearnmoreaboutvariouscharttypes•HeikinAshiHeikinAshiHeikinAshiisachartingtechniquethatcanbeusedtopredictfuturepricemovements.Itissimilartotraditionalcandlestickcharts.However,unlikearegularcandlestickchart,theHeikinAshicharttriestofilteroutsomeofthemarketnoisebysmoothingoutstrongpriceswingstobetteridentifytrendmovementsinthemarket.TobuildHeikenAshi,aformulaisusedinwhichpricedataareentered,whileordinarycandlesarebuiltexclusivelyonbarenumbers,withoutusinganycalculations.HowarecandlescalculatedontheHeikinAshichart?Tocalculate,HeikinAshiusestheOCHLformula:whichstandsforOpen,Close,High,Low.Thesearefourcomponentsthataffecttheshape,size,anddirectionofthecandles.Theformulafortheircalculationisgivenbelow:Open=(PreviousOpen+PreviousClose)/2.Inregularcandles,theopenlevelisatthecloseofthepreviouscandle(ifthereisnogapinthemarket).InHeikinAshi,anewcandlestickopensatthemiddlelevel,betweentheopeningandclosingofthepreviousone.Close=(Close+Open+High+Low)/4.Averagevaluebetweenlow,high,openandcloseofthecurrentcandle.High=Thehighestvalueofarecenthigh,open,orclose.Low=Thelowestvalueoftherecentlow,openorclose.Fromtimetotime,someofthesevalueswillbeequal,whichwillaffecttheoverallappearanceofthechart.Thechoiceofthetimeframewillalsohaveabigimpactonthelookofthechart.Fromtheaboveformulas,itbecomesclearthatthecurrentcandlestickoftheindicatoriscalculatedwithadelay,thereforethesignalsgivenbyHeikinAshiareofalaggingnature.Inthiscase,thecalculationsofanewcandlewillbepossibleonlyafterthenextoneappearsonthepricechart.Whentradingvolatileinstrumentsonsmalltimeframes,theindicatorcanhelptoeffectivelyfilteroutmarketnoise,falsebreakouts,andentrypoints.Itisworthnoting,however,thatwhenworkingonamarketwithlowvolatilityand/oronlargetimeframes,HeikinAshiwillrarelygivesignals.Moreover,thereliabilityoft