HEIKIN - Average,  ASHI - PaceHeikin Ashi pattern represents the average pace of the prices. These patterns are useful for getting an idea of the price trend.

Heikin Ashi Pattern

The regular candlestick patterns have no correlation between two consecutive candles. However, a Heikin Ashi bar is based on the previous day's low, high, open and closing prices. The bar starts from the middle of the previous day's candle.

Heikin Ashi vs Regular Japanese Candlestick Pattern

The size, color and relative direction of the candlestick help draw conclusions about the trend of the price movement. Advantages -<ul><li>Smoothness of price movement </li><li>Helps remove noise or false signals.</li><li>Easier trend analysis</li></ul>Disadvantages -<ul><li>Lagging indicator</li><li>Can't spot reversal in time</li><li>Late exits</li><li>Not efficient on lower timeframes</li></ul>

The Heikin Ashi candles do not show true prices. Use it as an indicator to understand the market trendDon't use this pattern for scalping strategies.

Caution!

Learning how to be a better investor/ trader

A valuable tool in technical analysis, Heikin-Ashi charts smooth out price action, and with candlestick charts can make it easier to spot trends and reversals when trading.

Heikin-Ashi: A Better Candlestick

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