فوركس ساتو

Using The Heikin
Ashi Technique
Enter and stay on the right side of the trend — or
when in doubt, stay out — with this Japanese charting
technique.forex sato
ince the introduction of the candlestick
method to the US some two decades
ago, it caused a revolution in perceiving
how the bullish and bearish forces  forex sato
perform in the Western markets. It has
become a popular charting tool, as traders have used
candlesticks to make chart formations easier to spot
and name. But interpreting candlesticks can be challenging.
To make things easier, the heikin-ashi technique
modifies the traditional candlestick chart. Let's
take a look at how it works.
BALANCING ON ONE FOOT
The heikin-ashi method {heikin means "average" or
"balance" in Japanese, while ashi means "foot" or
"bar") is a visual technique that eliminates irregularities
from a normal chart, offering a better picture of
trends and consolidations. Just by looking at a candlestick
chart created with this method, you get a good
idea of the market's status and its strength. Take a
look at the candlestick chart of Canon ADR in Figure
1A versus the heikin-ashi modified chart in Figure
1B. Which chart would you prefer to use?
CALCULATION
The heikin-ashi candlestick technique uses modified
open-high-low-close (OHLC) values and displays
them as candlesticks. The modified values are computed
using these definitions:
• haClose = (O+H+L+C)/4
• haOpen = (haOpen (previous bar) + haClose
(previous bar))/2.forex sato
• haHigh = Maximum(H, haOpen, haClose)
• haLow = Minimum(L, haOpen, haClose)
The "open," "high," "low," and "close" referred to
are of the current bar. The prefix ha- indicates the
corresponding heikin-ashi modified values. I have
used daily data throughout this article, so one bar
represents one trading day. Depending on the trading
time frame, you may employ other data, such as
intraday, weekly, or monthly.forex sato
The value haOpen is always set to the midpoint of
the body of the previous bar, while haClose is computed
as the average price of the current bar. The
modified high, haHigh, is chosen as the highest value
of the set {real high (H), modified open (haOpen),
and modified close (haClose)}. The same logic applies
to the definition of the modified low: It is the
lowest value in the set {real low (L), modified open
(haOpen), and modified close (haClose)}.
The first sidebar, "Heikin-Ashi OHLC Values," details
how to compute heikin-ashi values using Excel.
APPLYING IT
Looking at charts is the best way to understand the
main features of the heikin-ashi technique. If the
haClose is above haOpen, then a bullish sign occurs
(white candle). If haClose is below haOpen, then a
bearish sign appears (black candle).

 forex sato
At first glance, Figure 1 shows that the heikin-ashi chart
looks more compact and smooth compared to the traditional
chart. White candles display a rising trend, while black candles
indicate a downtrend. Gaps, which occur frequently on the
traditional OHLC chart, are not present because they are incorporated
into the modified candles. Strong positive trends have
long white bodies with no lower shadows, while strong negative
trends have long black bodies with no upper shadows.
When bodies become shorter, a weaker trend is anticipated
(see mid-October and end of December). In the beginning of
November, Canon weakened its uptrend and started a consolidation
period with several small bodies with both long upper
and lower shadows. A very small body with tall shadows on the
first trading day in 2000 warned about a possible change of the
rising trend. As consolidations contain several bodies with tall
shadows, it is not safe to assume that the presence of a small
body with tall shadows will indicate a change in trend. Figure
2 summarizes the five scenarios that can be identified on a
heikin-ashi candle chart.
EXAMPLES
To give you an idea of how to apply the heikin-ashi charting
technique, I will show you three examples using the Standard
& Poor's 500 index (SP500-HA), the price of gold (XGLDHA),
and Pfizer (PFE-HA). The heikin-ashi OHLC values were
calculated as indicated in the sidebar and plotted. Each chart
contains two candlestick subcharts: The top contains the modified
OHLC values, while the bottom has the real values. Each
number in the table in Figure 2 (1 to 5) applies to the chart
whenever a relevant scenario appears. They are labeled in