FrogAlgo Guides

Heikin Ashi Candles

We recommend using this structure of candle for more accuracy when using FrogAlgo Premium

What is Heikin Ashi Candles?

By lowering part of the market noise, Heikin Ashi candlesticks create a smoother appearance, which makes it simpler to discern trends and reversals. Heikin-Ashi has a propensity for the candles to remain red during downtrends and green during uptrends. The formula for Heikin Ashi computation is based on averages over two periods.
Heikin-Ashi calculation uses a formula based on two-period averages
How to read Heikin-Ashi candles Green candles indicate an uptrend and in case with no lower shadows the move can be assumed a strong uptrend. Red candles indicate a downtrend and if with no higher shadows a strong downtrend.
Candles with a small body surrounded by upper and lower shadows indicate a potential trend change or trend pause.
the Heikin-Ashi candlesticks do not show the exact open and close prices for a particular time period because they are averaged hence who need to exploit quick price moves may find Heikin-Ashi charts are not responsive enough to be useful