Heikin Ashi Candlesticks

Heikin-Ashi Candlesticks are an offshoot from Japanese candlesticks. Heikin-Ashi

Candlesticks use 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”. Taken together,

Heikin-Ashi represents the average-pace of prices. Heikin-Ashi Candlesticks are not

used like normal candlesticks. These candlesticks can be used to identify trending

periods, potential reversal points and classic technical analysis patterns.

Definition of 'Heikin-Ashi Technique:-

The Heikin-Ashi technique uses a modified formula:

Close = (Open+High+Low+Close)/4

Open = [Open (previous bar) + Close (previous bar)]/2

High = Max (High,Open,Close)

Low = Min (Low,Open, Close)

Interpretation:-

Heikin-Ashi Candlesticks are similar, but different than normal candlesticks. A

Heikin-Ashi Candlestick is hollow (white) when the HA-Close is above the HA-Open.

Conversely, a candlestick is filled (black) when the HA-Close is below the HA-Open.

This is similar to normal candlesticks, which are filled (black) when the close is

below the open and hollow (white) when the close is above the open.

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Observations across different asset classes:-

A. CURRENCY MARKET:-

EUR/USD DAILY HEIKIN ASHI CHART:

GBP/USD DAILY HEIKIN ASHI CHART:

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B. COMMODITY MARKET:-

GOLD

C. EQUITY MARKET:-

NIFTY

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D. INDIA 10 YEAR BENCHMARK BOND YIELD:

CONCLUSION:-

Heikin-Ashi Candlesticks provide chartists with a versatile tool that can filter noise, foreshadow

reversals and identify classic chart patterns. In fact, all aspects of classical technical analysis can

be applied to these charts. Chartists can use Heikin-Ashi Candlesticks to identify support and

resistance, draw trendlines or measure retracements. This technique can be used across all the

asset classes.

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company. We help companies explore extra-ordinary opportunities, manage and

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Disclaimer These views/ forecasts All are Interbank rates and do not include bank margins Copyright@ INDIA FOREX ADVISORS PVT LTD. The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of India Forex Advisors Pvt Ltd. These views/ forecasts/ suggestions, though proffered with the best of intentions, are based on India Forex reading of the market at the time of writing. They are subject to change without notice. Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsible for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.

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