Heikin-Ashi Charts

Heikin-Ashi charts are an offshoot of traditional candlestick charts created by Munehisa Homma in the 1700s. The Heikin-Ashi approach makes use of a modified pattern formation based on two-period averages rather than the open, high, low, and close used in traditional candlestick charts. The resulting Heikin-Ashi candlestick pattern attempts to better depict the trend by reducing some noise. This smooth out appearance of the chart makes it simpler to discern trends and reversals. However it also hides gaps and certain important price data.