Technical analysis · Beginner

Heikin-Ashi Candles

Heikin-Ashi draws the same data through a filter. It makes trends legible, and the open and close it shows are averages, not real prices.

Last reviewed 15 September 2026 by the MarketPro research desk · Editorial policy

In short

Heikin-Ashi is a charting method that recalculates each candle using the current and previous bar, producing a smoother view of trend than standard candlesticks. The close is the average of the current bar's open, high, low and close, and the open is the average of the previous Heikin-Ashi candle's open and close. Because those values are averages, the prices shown were never actually traded, so exact levels must come from a standard chart.

What to remember

The open and close on a Heikin-Ashi candle are averages, not traded prices. A stop placed from one is placed from a number the market never printed.
The smoothing makes trend character obvious: strong moves appear as runs of same-coloured candles with no wick on the trailing side.
Each candle inherits from the previous one, so the chart carries a memory. That memory is both the smoothing and the lag.
Keep both charts if you use it. Read trend on Heikin-Ashi, then switch to standard candles for the entry, stop and target.

Lesson 25 of 26 in Technical analysis

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Heikin-Ashi is a different way of drawing the same data

Heikin-Ashi recalculates each candle using both the current bar and the previous one, producing a smoother chart than raw candlesticks. It is not a separate data feed and not an indicator. It is the same price series drawn through a filter, and understanding what that filter does is the difference between using it well and being misled by it.

The calculation is short. The Heikin-Ashi close is the average of the current bar's open, high, low and close. The Heikin-Ashi open is the average of the previous Heikin-Ashi candle's open and close. The high and low are then the extremes of the current bar and those two values. Because each candle inherits from the one before it, the chart carries a memory, and that memory is what smooths it.

What the smoothing gives you

Strings of same-coloured candles. A strong trend appears as a run of candles in one colour, often with no wick on the trailing side, which makes trend character visible at a glance.
Fewer visual whipsaws. Single counter-trend candles that interrupt a raw candlestick chart often disappear entirely, so a trend looks like a trend instead of a struggle.
Clearer transitions. Candles with small bodies and wicks on both sides tend to cluster where a trend is losing coherence, which is easier to spot than on a raw chart.

The cost, stated plainly

The Heikin-Ashi open and close are averages, so they are not prices the market traded at. If a Heikin-Ashi candle shows a close of 1.0912, no transaction happened at 1.0912 at the end of that period. The real close might have been 1.0925.

This matters the moment you need an exact level. A stop placed from a Heikin-Ashi candle's low is placed from a synthetic number. A breakout measured against a Heikin-Ashi high is measured against a value that does not exist in the order book. This is not a subtle distinction, it is a difference of several pips on a routine candle and much more on a volatile one, which changes your risk and therefore your size when you run it through the position size calculator.

The same candle, drawn twice

Suppose a raw daily candle opens at 1.0880, trades down to 1.0840, up to 1.0930 and closes at 1.0918. The Heikin-Ashi close is the average of those four numbers: 1.0892. If the previous Heikin-Ashi candle had an open of 1.0850 and a close of 1.0878, the new Heikin-Ashi open is the average of those two: 1.0864.

So the Heikin-Ashi candle spans 1.0864 to 1.0892, a 28 pip body, while the real candle closed at 1.0918. The close drawn on your chart sits 26 pips below the price the market actually printed, and that gap persists for as long as the smoothing is working. It is a trend picture, and it is a trend picture bought with accuracy.

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The right way to run it

Keep both charts. Use Heikin-Ashi to read trend character, then switch to standard candles for anything involving a specific price: the entry, the stop, the target, the level. Many platforms let you keep one instrument open in two windows, which makes this practical rather than theoretical.

If you can only have one, have standard candles. You can learn to read trend character from raw candles with practice, but you cannot recover a real price from a Heikin-Ashi chart, and every price decision you make there will be a few pips wrong in a direction you have not measured.

What it is genuinely good at

The one thing Heikin-Ashi does better than a raw chart is answer a question that is otherwise surprisingly hard: is this move coherent, or is it a series of pushes and rejections that happens to be pointing one way? A run of eight same-coloured candles with flat trailing edges is a different market from eight candles of the same net movement with long wicks in both directions, and the raw chart makes that comparison harder than it needs to be.

That is worth something specific. Coherence is a reasonable input into how you manage a position, whether you trail a stop tightly or give the trade room. It is not an input into whether to enter, and treating it as one is how the smoothing starts making decisions for you.

The costs of the smoothing

It lags, because it inherits. Each candle averages in the previous one, so turns show up later than on a raw chart. That is the same trade every smoothing tool makes.
It can hide the candle that mattered. A sharp rejection wick at a key level, the kind that tells you a level was defended, may be smoothed into an unremarkable body.
Gaps disappear. Because the open is derived from the previous candle rather than from the market open, weekend gaps in forex are largely smoothed out of view.
It encourages holding too long. A run of same-coloured candles is reassuring, and reassurance is not what you want from a chart when a position is running against your plan.

Who it suits

Heikin-Ashi suits trend traders on higher timeframes who want a cleaner read on whether a move is coherent, and who are disciplined about switching back to real prices to execute. It suits scalpers and anyone trading precise levels far less well, because at that resolution the gap between the drawn price and the traded price is a large fraction of the whole trade. Before adopting it, check how it renders on the pairs you trade and how far the smoothed close typically sits from the real one, using the pip calculator to turn that distance into money.

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Written and reviewed by the MarketPro research desk

MarketPro is a trading-signal and trading-education app operated by Harajuku Holdings LTD (Cyprus). Our signal desk publishes and tracks every trade idea in-app, and every page here is checked against the app's live behaviour before publishing. Last reviewed 15 September 2026. How we produce signals and content · About MarketPro

FAQ

Heikin-Ashi Candles: questions

How are Heikin-Ashi candles calculated?

The Heikin-Ashi close is the average of the current bar's open, high, low and close. The Heikin-Ashi open is the average of the previous Heikin-Ashi candle's open and close. The high and low are the highest and lowest of the current bar's extremes and those two derived values. Because each candle references the one before it, the chart smooths progressively.

Can you place a stop loss using Heikin-Ashi candles?

You can, but the level will be a synthetic price rather than one the market traded at, which means your real risk differs from what the chart suggests. On a routine candle the gap is a few pips and on a volatile one it is considerably more. The safer approach is to read trend on the Heikin-Ashi chart and set every actual price from standard candlesticks.

Is Heikin-Ashi better than normal candlesticks?

It is not better or worse, it is a different trade-off. Heikin-Ashi buys a clearer picture of trend character at the cost of price accuracy and some lag, since each candle averages in the one before it. Trend traders on higher timeframes often find the trade worthwhile, while anyone trading precise levels or short timeframes usually does not.

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