Heikin-AshiHA
Heikin-Ashi is a chart type whose candles are calculated from averages of current and previous prices to smooth out noise; its prices are not actual traded prices.
Regular candles flicker between colours even in a steady trend. Heikin-Ashi averages the numbers first, so trends show up as long runs of same-coloured candles — at the cost of hiding the real prices.
- Category
- Technical Analysis
- Reading time
- 3 min
- Also called
- Heikin Ashi candles, HA candles, Average bar chart
- Updated
Heikin-Ashi in plain words
The name roughly means average pace, and it represents the average pace of prices.1
Its candles are built from averages of the current and prior period, which makes the chart smoother.2
Its open, high, low and close are not prices the asset actually traded at.2
How Heikin-Ashi candles are calculated
HA close
Average the current open, high, low and close.1
HA open
Average the prior HA open and prior HA close.1
HA high
Take the maximum of the high, HA open and HA close.1
HA low
Take the minimum of the low, HA open and HA close.1
Colour the candle
It is hollow when HA close is above HA open.1
Read the trend
Use runs of candles to identify trending periods and potential reversals.1
Worked examples
Example 1 — Computing an HA close
HA close = $101A hypothetical day: open $100, high $104, low $98, close $102.
| Sum | $404 |
| HA close | $404 ÷ 4 = $101 |
The HA close is the average of open, high, low and close, so it is $101 rather than the real $102 close.1
Example 2 — Computing an HA open
HA open = $100The prior HA candle had HA open $99 and HA close $101.
| HA open | ($99 + $101) ÷ 2 = $100 |
The HA open averages the prior HA open and close, which is why HA candles rarely gap.1
Example 3 — The price gap problem
$2 worse entry than the chart suggestsA hypothetical HA signal says buy at $5, but the stock has gapped to $7.
| Signal price | $5 |
| Real price | $7 |
This is the risk CMC describes: a signal at $5 while the stock already trades at $7, because HA values are not real traded prices.2
Heikin-Ashi vs regular candlesticks
| Aspect | Heikin-Ashi | Regular candles |
|---|---|---|
| Prices shown | Averaged | Actual traded |
| Noise | Smoothed | Raw |
| Gaps | Mostly hidden | Visible |
| Best for | Trend reading | Exact entries and stops |
How traders use Heikin-Ashi
Staying in trends
Holding a position while HA candles keep the same colour in a Trend.
Spotting slowdowns
Watching for small bodies as Momentum fades.
Filtering noise
Reducing whipsaws in Swing Trading.
Pairing with real prices
Placing orders off a normal Candlestick chart.
Advantages and disadvantages
Advantages
- Makes trends easier to see.
- Fewer colour flips in steady moves.
- Simple formula.
Disadvantages
- Prices are not real traded prices.
- Hides gaps.
- Lags turning points.
- Poor for precise stops and targets.
Going deeper
Read as far as you need. Each level builds on the one before it.
Common mistakes
Using HA prices for orders
Placing a limit at an HA level that never traded.
Expecting early signals
Forgetting the averaging lags.
Ignoring gaps
Missing real overnight jumps.
Mixing up colours
Reading HA colour as the real close vs open.
Check your understanding
Test yourself before moving on. Each answer comes with an explanation.
Key points to remember
- HA averages current and prior prices.
- It smooths noise and shows trends.
- Its prices are not real.
- It hides gaps and lags.
- Trade off real prices.
Frequently asked questions
Can I day trade with Heikin-Ashi?
Why do HA candles rarely gap?
Is HA a lagging tool?
Further learning
- Candlestick
The standard chart HA modifies.
- Moving Average
Another smoothing tool.
- Trend Following
A style HA suits.
- Price Gap
What HA hides.
Sources
This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.
- StockCharts ChartSchool. Heikin-Ashi Candlesticks (opens in a new tab) Checked .
- CMC Markets. Heikin Ashi (opens in a new tab) Checked .
Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. We are not affiliated with any publisher linked above. Last reviewed . Report an error or request a source credit.