What is Heiken Ashi?

You’ve probably heard of the three most common chart types: line charts, bar charts, and candlestick charts.

However, there is another sort of chart that you should be aware of because it displays price activity in a completely different way. “Heiken Ashi,” sometimes known as “Heikin-Ashi” or “Heiken Ashi,” is a charting approach that, at first glance, resembles a typical Japanese candlestick chart.

The manner by which candlesticks are calculated and plotted on a chart differs. Traditional Japanese candlesticks are excellent for identifying suitable entry points since they show probable reversals (such as a shooting star) or breakouts (like a bullish marubozu closing above a resistance level).

But what if you’re already in a trade?

When applied to a price chart, the Heiken Ashi approach might assist you to determine whether to stay in the trade or exit.

Heiken Ashi charts improve the readability of candlestick charts for traders who want to know whether to continue in a trade and ride a strong trend and when to exit when the trend fades.

Heiken Ashi is a modified candlestick charting approach that rearranges how the price is shown to give trend traders more confidence when selecting whether to stay in a trade or exit.

Heiken Ashi charts are used by some traders, mainly long-term traders, as an alternative to standard Japanese candlestick charts.

Others combine them with conventional Japanese candlestick charts, switching back and forth between the two.