How to trade using the Heikin Ashi indicator

13 thg 1, 2023

Difficult analysis methods can take a lot of time to analyze before starting a trade, so we try to make chart analysis as easy and fast as possible.

One of the things used in that sense is the chart analysis and trading method using Heikin Ashi.


What I am trying to say is not in principle, so if you want to learn more about Heikin Ashi, check it out on the Internet or on TradingView's Educational Ideas.


Still, let's learn the basic concept of Heikin Ashi.

Heikin Ashi is a candlestick designed to be displayed by averaging Open, Close, High, and Low.

Thus, it makes trend trading such as moving averages possible.


Formula by Heikin Ashi

Open price - (previous candle's open + previous candle's close) / 2

Close - (Open + Close + Low + High of the current candlestick) / 4

High - The highest price among High, Heikin Ashi's Open, and Heikin Ashi's Close on the current time frame chart.

Lowest Price - Lowest of current time frame charts, Heikin Ashi's Open or Heikin Ashi's Close.


However, if you want to trade directly by looking at the Heikin Ashi candle chart, it is difficult to adapt at first because the closing price is different from the actual order price.

In order to solve this problem, I created and used an indicator that displays only the open and close values of Heikin Ashi on the screen while using the existing candlestick chart.


Heikin Ashi's method of interpretation is that the larger the body of the candle, the stronger the trend.

And, the more tails, the more likely it is to form a trend.

Other interpretation methods are not easy to use in practice.


To compensate for this, the HA-Low and HA-High indicators are made with much effort.

The formula for this indicator is public, so you can look it up.


Heikin Ashi reflects trends faster than any other analysis method.

Therefore, I think it is well suited for trend-following trading such as the coin market.

It provides a trading method suitable for following the trend, but it is lacking in trading using it.

So, we created HA-Low and HA-High indicators to form support and resistance points, and traded based on whether they were supported or resisted at those points.



HA-Low and HA-High are expressed as shown in the figure above.

HA-Low is expressed as a correlation with the RSI of 30.

Therefore, when supported at the HA-Low indicator point, a basis for buying is created.


HA-High is expressed as a correlation with RSI 70.

Therefore, if resistance is encountered at the HA-High indicator point, grounds for selling are created.


Resistance at the HA-Low indicator point increases the likelihood of renewing lows.

Conversely, if it is supported at the HA-High indicator point, it is more likely to renew the high.

Therefore, it is possible to identify new trends using the HA-Low and HA-High indicators.


You will use several analysis methods to see trends.

Most analysis methods do not have a way to mark points for trading, i.e. support and resistance points.

Even on a regular Heikin Ashi chart, there is no way to plot support and resistance points.

So, when you finish your analysis and start trading, you end up wondering where to start trading.


In most analysis methods, users draw lines to indicate support and resistance points and trade accordingly.

To make things more objective, you can use tools such as Fibonacci ratios.

However, this method has the disadvantage that the user must specify the selection point.

Since different results are obtained depending on where the selection point is set, a serious problem may arise in changing the selection point according to the user's psychological state when drawing support and resistance points.


To prevent this problem, we added an RSI indicator to the trading method using Heikin Ashi to express support and resistance points without user choice.


This allows us to represent basic support and resistance points on the chart at which to initiate trades.


Heikin Ashi are candlesticks that act like moving averages, so they provide a basic way to view trends.

Thus, there is no need to plot trends in other ways.


As shown in Heikin Ashi's formula, it is expressed as the value of the previous day's candlestick and the current candlestick, so it is not enough to see a long trend.

The MS-Signal indicator was designed to compensate for this.