Thursday, September 09, 2004
Heikin-Ashi Candle Charts
Aside from many chat sites discussing how to code the special candles of this method, there is scant else on the web regarding this method. The earliest mention I found is by Forex trader and Ichimoku chartist Yasuji Yamanaka, who in addition to publishing many analyses using this method, also wrote two English language articles on heikin ashi (
pt. 1 and
pt. 2, pdf files). Heikin-Ashi means "average bar" and is, according to Mr. Yamanaka, a method introduced by a Japanese commodities trader who, of course, made a fortune with it. Also according to Mr. Yamanaka, it is a derivative of the Ichimoku method, after Ichimoku Sanjin, a pseudonym of another smart cookie. In addition to Mr. Yamanaka's articles, there is also a well-popularized article by
Dan Valcu, writing in TASC. To see how they look, try the slideshow below, showing the ES or SPX in various time frames. In addition to the tailored indicators I use, you will see heavy black trendlines on some of the charts. These are the new Auto-Trend lines, automatically discovered by the
Ensign program, one of the many new features introduced by Howard Arrington, Ensign proprietor and chief programmer, this month. The simple rules for trading heikin ashi are summarized in the following table, attributed to Mr. Yamanaka:
Previous • Auto/Stop• Next
Labels: indicators, trading-method
At last, over the rim
of the waiting earth
the moon lifted with
slow majesty
till it swung clear of the horizon and rode off,
free of moorings
- Kenneth Grahame,
The Wind in the Willows
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