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Heikin-Ashi is a Japanese trading indicator that means "average pace."^[1] Heikin-Ashi charts resemble candlestick charts, but have a smoother appearance as they track a range of price movements, rather than tracking every price movement as with candlesticks. Heikin-Ashi was created in the 1700s by Munehisa Homma,^[2] who also created the candlestick chart. These charts are used by traders and investors in stock, bond, futures, cryptocurrency and forex markets to help determine and predict price movements.^[3]

Similarly to candlesticks, Heikin-Ashi has a body and a wick on its candles, however, they do not have the same purpose as on a candlestick chart.^[4] The close of a Heikin-Ashi candle is calculated by the average price of the current bar or timeframe, e.g. a daily timeframe would mean that each bar represents the price movements in that specific day. The formula for the close of the bar or candle is calculated by (open + high + low + Close) $\div$ 4.^[5] The open of a Heikin-Ashi starts at the midpoint of the previous candle, it is calculated by the (open of previous bar + the close of the previous bar) $\div$ 2.^[6] The highest and lowest price point is represented by wicks similarly to candlesticks.^[1]

The main purpose of a Heikin-Ashi chart is to show the general trend of the price (direction of price) and the strength of each trend,^[7] this is represented simply by the wicks or (shadows), these are small lines that stick out from the main body of the candle^[8] a series of candles that are going up and have no lower wick signifies a strong uptrend and vice versa with candles going down with no upper wick.^[9]A doji on the chart signifies a possible change in the price trend.

Heikin-Ashi is used by many traders and is normally paired with other indicators to indicate long (buy) and short (sell) positions.^[7]

References

^ ^a ^b Kuepper, Justin. "Heikin-Ashi: A Better Candlestick". Investopedia.
^ "Heikin-Ashi Technique Definition and Example".
^ "Heikin Ashi Chart Basics".
^ "Heikin Ashi Chart Basics". The Balance.
^ Mitchell, Cory. "Heikin-Ashi Technique Definition and Example". Investopedia.
^ "What Is The Heiken Ashi Indicator And How Do You Use It?". Admirals.
^ ^a ^b "How to Use a Heikin Ashi Chart". BabyPips.com. April 19, 2020.
^ "How to Use a Heikin Ashi Chart". 20 April 2021.
^ "Heikin-Ashi [ChartSchool]". school.stockcharts.com.

[auto1-1] Kuepper, Justin. "Heikin-Ashi: A Better Candlestick". Investopedia.

[2] "Heikin-Ashi Technique Definition and Example".

[3] "Heikin Ashi Chart Basics".

[4] "Heikin Ashi Chart Basics". The Balance.

[5] Mitchell, Cory. "Heikin-Ashi Technique Definition and Example". Investopedia.

[6] "What Is The Heiken Ashi Indicator And How Do You Use It?". Admirals.

[auto-7] "How to Use a Heikin Ashi Chart". BabyPips.com. April 19, 2020.

[8] "How to Use a Heikin Ashi Chart". 20 April 2021.

[9] "Heikin-Ashi [ChartSchool]". school.stockcharts.com.

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 [[File:Difference between Heikin-Ashi chart and Candlestick chart.png|thumb|difference between traditional candlestick chart and Heikin-Ashi chart ]]
-Similarly to candlesticks, Heikin-Ashi has a body and a wick on its candles, however, they do not have the same purpose as on a candlestick chart.<ref>{{Cite web|url=https://www.thebalance.com/heikin-ashi-chart-basics-1031191|title=Heikin Ashi Chart Basics|website=The Balance}}</ref> The close of a Heikin-Ashi candle is calculated by the average price of the current bar or timeframe, e.g. a daily timeframe would mean that each bar represents the price movements in that specific day. The formula for the close of the bar or candle is calculated by 1/4 <math>\times</math> (open + high + low + Close).<ref>{{Cite web|url=https://www.investopedia.com/terms/h/heikinashi.asp|title=Heikin-Ashi Technique Definition and Example|first=Cory|last=Mitchell|website=Investopedia}}</ref> The open of a Heikin-Ashi starts at the midpoint of the previous candle, it is calculated by the (open of previous bar + the close of the previous bar) <math>\div</math> 2.<ref>{{Cite web|url=https://admiralmarkets.com/education/articles/forex-indicators/what-is-heiken-ashi-and-how-do-i-use-it|title=What Is The Heiken Ashi Indicator And How Do You Use It?|website=Admirals}}</ref> The highest and lowest price point is represented by wicks similarly to candlesticks.<ref name="auto1"/>
+Similarly to candlesticks, Heikin-Ashi has a body and a wick on its candles, however, they do not have the same purpose as on a candlestick chart.<ref>{{Cite web|url=https://www.thebalance.com/heikin-ashi-chart-basics-1031191|title=Heikin Ashi Chart Basics|website=The Balance}}</ref> The close of a Heikin-Ashi candle is calculated by the average price of the current bar or timeframe, e.g. a daily timeframe would mean that each bar represents the price movements in that specific day. The formula for the close of the bar or candle is calculated by (open + high + low + Close) <math>\div</math> 4.<ref>{{Cite web|url=https://www.investopedia.com/terms/h/heikinashi.asp|title=Heikin-Ashi Technique Definition and Example|first=Cory|last=Mitchell|website=Investopedia}}</ref> The open of a Heikin-Ashi starts at the midpoint of the previous candle, it is calculated by the (open of previous bar + the close of the previous bar) <math>\div</math> 2.<ref>{{Cite web|url=https://admiralmarkets.com/education/articles/forex-indicators/what-is-heiken-ashi-and-how-do-i-use-it|title=What Is The Heiken Ashi Indicator And How Do You Use It?|website=Admirals}}</ref> The highest and lowest price point is represented by wicks similarly to candlesticks.<ref name="auto1"/>
 The main purpose of a Heikin-Ashi chart is to show the general trend of the price (direction of price) and the strength of each trend,<ref name="auto">{{Cite web|url=https://www.babypips.com/learn/forex/how-to-use-a-heikin-ashi-chart|title=How to Use a Heikin Ashi Chart|date=April 19, 2020|website=BabyPips.com}}</ref> this is represented simply by the wicks or (shadows), these are small lines that stick out from the main body of the candle<ref>{{Cite web|url=https://www.babypips.com/learn/forex/how-to-use-a-heikin-ashi-chart#:~:text=Because%20the%20Heikin%20Ashi%20candlesticks,)%2C%20the%20stronger%20the%20trend.|title = How to Use a Heikin Ashi Chart|date = 20 April 2021}}</ref> a series of candles that are going up and have no lower wick signifies a strong uptrend and vice versa with candles going down with no upper wick.<ref>{{Cite web|url=https://school.stockcharts.com/doku.php?id=chart_analysis:heikin_ashi|title=Heikin-Ashi [ChartSchool]|website=school.stockcharts.com}}</ref>A [[doji]] on the chart signifies a possible change in the price trend.