|HEIKIN ASHI (HA) CANDLES|
| 하창호||10-16 15:02 | HIT : 4,150|
HEIKIN ASHI (HA) CANDLES|
HA candles can filter out "noise" (1-2 day random fluctuations in price), allowing you to view more clearly, and hence trade, a major price trend.
HA is an averaging technique, that uses the average of prior day's candle(s), to plot the summary HA candle. Because it uses averaging, HA candles will always 'lag' the real OHLC action by 1-2 days, hence their signals are late. However, given that one can not forecast imminent price direction with certainty, this is also true of most other trend-following techniques.
The above chart posted by Mr Admin is a fine example of how to use HA candles. When today's candle turns green, you buy; when it turns red, you sell. If prices continue to trend long enough to generate a prolonged sequence of candles of the same color, then you will profit. You can see the green uptrends and red downtrends clearly in the chart.
The size of the candle body can also be helpful. When a trend weakens, successive candle bodies get smaller, which can sometimes point to an impending reversal. A "doji" (cross shaped) candle is the smallest possible bodied candle, and is an indication of indecision in the market.
It's important not to associate the wicks and tails on HA candles as shifts in buying and selling pressure, as one does with 'normal' candles. For a good article on caveats in interpreting HA candles, see here:
Also, more information on Heikin-Ashi in the following threads: