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Technical analysis

Heikin-Ashi

By Jarosław Wasiński • Published: • Updated:
A chart method using transformed open, high, low and close values to smooth price patterns. Its displayed prices are synthetic and may differ from tradable quotes. Signals can be defined from these charts, but execution and backtests must use appropriate market-price data rather than assume fills at synthetic candle prices.
Example. Market O/H/L/C is 1.1000 / 1.1040 / 1.0980 / 1.1020. HA Close = 1.1010. Previous HA Open of 1.0990 and HA Close of 1.1010 give current HA Open = 1.1000. HA High = 1.1040 and HA Low = 1.0980. The HA Close differs from the market Close of 1.1020.

Four synthetic values

HA Close averages current O, H, L and C. HA Open averages previous HA Open and HA Close. HA High takes the maximum of market High, HA Open and HA Close; HA Low takes the corresponding minimum. Recursive initialisation needs a starting convention, so a short input history can produce differences.

What smoothing changes

The series retains one bar per time interval, but transforms the displayed body and sometimes extremes. A run of one colour describes that transformation, not an independent trend measurement or guaranteed continuation. Current values still change while the source candle forms. It is not an unprocessed record of executable quotations.

Signal versus actual price

A rule can use HA colour or shape, but trades must be valued at appropriate market Bid/Ask or instrument prices. A test filling at synthetic HA Open or Close can invent unavailable prices. Separate signal data from execution data, specifying time, costs and the completed-bar rule. Smoothing does not remove market gaps or execution constraints.

Source of the definition

MetaQuotes: Heikin-Ashi. Documentation of the construction or concept is not a guarantee of strategy results.

FAQ

Is HA Close necessarily an executable price?
No. It is an average calculated from OHLC; execution depends on the actual market.
Does Heikin-Ashi remove gap risk?
It can change how a gap looks, but does not remove missing quotes, costs or exposure.

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Jarosław Wasiński

Editor-in-chief, ForexMechanics.com • Macro & FX analyst

Independent analyst and practitioner with over 20 years of experience in financial markets. Actively involved in Forex since 2007, with a focus on fundamental analysis, OTC market structure, and disciplined capital risk management.

  • Creator and editor-in-chief of MyBank.pl, providing reliable financial education since 2004.
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