FAQ

During the past years, the inbox was regularly full of questions and queries related to Heikin-Ashi, trading and investing. Our FAQ section highlights a small part of those. If you have other questions, please contact us and we will bring clarity.

Q: I currently use traditional Japanese candlesticks. Why should I switch to Heikin-Ashi?

  • One very important reason is the long time spent on understanding correctly the traditional candlesticks. Heikin-Ashi candles are obvious - black, white, dojis - therefore you focus more on trading and less on theoretical stuff. You spend less time on translating them, more time on trend and trading.
  • Heikin-Ashi charts show clear trends and reversals, eliminating the need for guesswork.
  • Heikin-Ashi is both visual and quantifiable.
  • Heikin-ashi takes one candle at a time. If you look at price candles and patterns in the 'context', you add subjective judgment. Who needs it?

Q: How can Heikin-Ashi remove Japanese candlesticks patterns from my trading?

  • The first Heikin-Ashi book How to Trade without Candlestick Patterns describes in detail how you can remove from charts traditional Japanese candlestick patterns and replace them with Heikin-Ashi colored candles or/and indicators.
  • Heikin-ashi is versatile, offers flexibility, and you have choices.
  • Don't forget that Heikin-Ashi, by design, removes traditional Japanese candles patterns. By design.
  • As an example, set up a Heikin-Ashi chart (candles + Heikin-Ashi indicators). Have traditional candlesticks (and patterns) in another chart, compare the two, check what happens with the patterns, and see which chart takes shorter time to translate and understand.

Q: When I look at Heikin-Ashi charts, I immediately think of a mechanical trading system.

  • Heikin-Ashi, as all any visual and quantifiable known technique, is not a money printing machine. Real traders understand this very well. Newcomers must learn Heikin-Ashi and see what it is.
  • Heikin-Ashi is a far better instrument to visualize trends and reversals in addition to its proven capability to warn about future reversals. Try to use it with other systems you may use already or design. Printing money in trading is a tough job.

Q: I am a FOREX trader. Which is the best time frame to use heikin-ashi with?

  • 'Best' is subjective, it means different perceptions to different people. There is no best. Use 'the most suitable for me' approach.
  • Time frames are related to your personal profile.
  • Heikin-Ashi can be applied to any time frame and financial instruments what have a price.
  • Try Heikin-Ashi charts in several time frames and see the results. Are they clear or foggy?
  • Instruments that historically display stronger trends are better candidates for your Heikin-Ashi approach.

Q: I trade (too) many Japanese candlesticks patterns. How many patterns should I expect switching to Heikin-Ashi?

  • Heikin-ashi, as a visual tool, has no patterns and only three candle types: white, black, and dojo.
  • The challenge to learn, memorize, identify, and apply patterns is completely removed when using Heikin-Ashi as a visual instrument.

Q: I've seen that a doji on a Heikin-Ashi chart is a sign of immediate reversal. True? Are there any other indications?

  • Yes, it's a sign of a trend change. From up to down, from down to up, from up to consolidation, from down to consolidation.
  • The sudden change of a Heikin-Ashi candle color is another sign of trend reversal.
  • Dojis mean indecision. Therefore, they are not 100% reliable.
  • To increase their reliability, use Heikin-Ashi charts with Heikin-Ashi indicators (best solution) or with other technical indicators.

Do you have any other questions?

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