Heikin Ashi Candles, Formula | Heikin Ashi Strategies & Charts

Heikin Ashi candle

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Heikin Ashi Candles, Formula | Heikin Ashi Strategies & Charts

Today We will discuss the Heikin Ashi candle. Heikin Ashi Candles, Formula | Heikin Ashi Strategies & Charts

Heikin Ashi is a type of trading chart that originated in Japan. And Candlesticks are an offshoot from Japanese candlesticks. It’s very popular among them.

If you know the correct way to use Heikin Ashi then you will not need any other indicator.

Only with the help of this candle can you know about the advanced movement of the stock from here.

So today we will know the correct method of using the Heikin Ashi candle. You can see different types of candles in the previous article.

Read candlesticks – What Is Gravestone Doji? – Dragonfly Doji & Gravestone Doji Pattern

Heikin Ashi Candlesticks

However, the shape of the Heikin Ashi candle is different.

Each Heikin Ashi green candle has a shadow on the top. And each Heikin Ashi red candle has a shadow at the bottom.

Some Heikin Ashi candles have shadows at the top and shadows at the bottom.

It looks a lot like a Doji candle. Now, remember that if you are using the Heikin Ashi candle, Doji acts as a reversal candle.

I also said a while ago, when the share price goes up, Heikin Ashi continues making green candles.

Again, if a share price continues to fall, Heikin Ashi creates a red candle.

Heikin Ashi Candle – Heikin Ashi Chart

Heikin Ashi Formula

There are many differences between normal candles and Heikin Ashi.

Normal candles never make continuous green candles or red candles. But Heikin Ashi makes continuous green candles or red candles.

Suppose a share price is falling gradually, then if you are using a normal candle you will see three or four red candles then a green candle, again some red then green candles, and fall downwards.

In a word, the share price is falling, but you will get 2-3 green candles in that downtrend.

Now if you use Heikin Ashi candle on the same stock at the same time.

You will not find a single green candle. In a word, when there is a price to fall you will see a continuous red candle. Again if a stock price starts to go up, it makes a continuous green candle.

How to use Heikin Ashi Strategies?

You can use this facility of Heikin Ashi in your trading system.

Suppose you bought a share, you can see the normal candle at 345 rates at that time, after giving some green candle, the stock is making a red candle near 347rate.

And you can sell those shares for fear of seeing that red candle. After selling the shares you will see that the green candle has started giving again and has reached 352.

In that case, your profit margin is much less. the red candle is confusing because of which you have to sell shares at a low profit.

If you use the Heikin Ashi candle. In that case, Heikin Ashi would not give any kind of red candle.

And you could take 345 to 350-352.

In this way, Heikin Ashi tries to dispel the illusions of your mind, able to make more profit.

You will see that when Heikin Ashi makes candles, the candle size gets bigger, so the share price keeps increasing. The size of the Heikin Ashi candle gets smaller and smaller. And when the share price goes up a lot, Hekin makes ashi doji candles.

Normal candle vs Heikin Ashi Candle – Heikin Ashi Chart

Heikin Ashi Strategies Part 2

As I said before, Doji is a reversal candle. This means that if a Doji makes a candle after a share price has risen a lot, consider that the share price may fall. Right now you can book profits, and short-sell if you want.

Again if any stock is running in a downtrend. Heikin Ashi will continue to make red candles. Here too you can earn good money by short selling.

Of course, I’m giving you a link to a YouTube video. Watching this video will help you to understand more.