Heikin-Ashi

Understanding Heikin-Ashi Chart Type

HA

The Heikin-Ashi chart type is constructed like a regular candlestick chart (except with the new values above). The time series is defined by the user depending on the type of chart desired (daily, hourly, etc.). Instead of using the open-high-low-close (OHLC) bars like standard candlestick charts, the Heikin-Ashi technique uses a modified formula:

• For the first bar of the data series HA_Open = Open
• For other bars: HA_Open = [HA_Open (previous bar) + HA_Close (previous bar)]/2
• HA_Close = (Open+High+Low+Close)/4
• HA_High = Max (High, HA_Open, HA_Close)
• HA_Low = Min (Low, HA_Open, HA_Close)

Selecting Heikin-Ashi Chart Type

To create a new chart:

1. Open the Format Instrument window by one of the following methods:

   • Click the New Chart Window icon on the Main toolbar; or:
   • Use the Insert key on the keyboard; or:
   • In the main menu select File, then point to New and click New Chart Window.

2. Select the Instrument tab.
3. Select a data feed from the Data Source list.
4. Select a symbol from the list of available symbols in All Symbols tab, or use the category tabs to list only a particular category of symbols; the list can be sorted by any column, in ascending or descending order, by clicking on the column header. If you can’t find a symbol, see Adding Symbol(s) to Symbol List section.
5. Select the Settings tab.
6. Select Heikin-Ashi from the Chart Type list.
7. Enter the Resolution in the corresponding boxes.
8. Select Break on Session if you want to see the session breaks.
9. Double-click the symbol, or click OK, to create a chart with the default settings.

Heikin-Ashi Chart Type can also be selected for your open chart if you click the Heikin-Ashi Chart icon on the Chart Analysis toolbar.

Selecting Heikin-Ashi Chart Style

Chart style can be selected from the Format Instrument window:

1. Open the Format Instrument window.
   To open the Format Instruments window, click the Format Instruments icon on the main toolbar;
   if the Format Objects window appears, select the symbol and click the Format button.
   
   The Format Instruments window can also be opened by one of the following methods:
     - Position the mouse pointer over the symbol's data series; double-click once the Pointer changes into a Hand ;
     - Position the mouse pointer over the symbol's data series; once the Pointer changes into a Hand right-click and then click Format Symbol Name;
     - Right-click on an empty area of the chart and then click Format Instruments; if the Format Objects window appears, select the symbol and click the Format button;
     - Select Format in the main menu and click Instrument; if the Format Objects window appears, select the symbol and click the Format button.
2. Select the Style tab.
3. In the Chart Style section click on the component element to be changed.
4. In the Color column select one of the standard 40 colors from the palette box, or click the Other button to create custom colors.
5. From the Width list select a width of the body border and the wick.
6. To apply the most recently selected component's style to all components, click the Apply to All Components button.
7. To display the Last Price Marker select the Last Price Marker check box, or clear the box to hide the marker; the color of the marker is the same as the color of the Down component.

To use these style settings for all new charts of this type, select Use as Default check box.

Auto trading orders on Heikin-Ashi Chart Type

There are some differences between Regular and Heikin-Ashi chart types with regards to order generation in real time and backtesting.

Backtesting and Simulated Trading

There is no difference between order generation on Regular and Heikin-Ashi chart types with regards to Backtesting and Simulated Trading.

To learn how Intra-Bar Order Generation and Bar Magnifier work on Heiken Ashi Chart Type, see this page.

Real-Time simulation

Type of the strategy	Regular Chart Type	Heikin-Ashi Chart Type
Buy next bar at market	Order is placed on the first tick of the new bar, i.e. on Open of next bar.	Order is placed on Open of Heikin-Ashi bar, when the new tick of this bar is received. Open of the Heikin-Ashi bar is not equal to the price of the received tick. HA Open = (HA Open[1] + HA Close[1])/2.
Buy this bar at close	Order is placed on the last tick of a bar, i.e. on the Close of the current bar.	Order is placed on the Close of the current Heikin Ashi bar. Close of the Heikin Ashi bar is not equal to the price of the tick that closes this bar. HA Close = (Open + High + Low + Close)/4.
Price orders	Order is placed at the price of the first tick that satisfies Stop or Limit conditions.	Order is placed at the price of the first tick that satisfies Stop or Limit conditions.