How to Do Heikin Ashi Math

How do you calculate Heikin Ashi? 🤔

Let's peep how to crunch those Heikin Ashi candlesticks and slap 'em on a chart like a true pro. 📊

Remember what we said last time? To a total rookie, these might look just like your everyday candlesticks, but plot twist: they ain’t. 💡

It's kinda like telling apart a hunky husky from an actual wolf. 🐺

Looks totes adorbs, right? Like it couldn't hurt a fly? 🥺

Feeling the vibe to hug it? 👐

But hang on—Husky doggo or wild wolf?

Before ya go throwing snuggles, better figure that out or you'll find yourself catching teeth instead of cuddles, turning into a wolf feast buffet. 🙉

Same deal with Heikin Ashii charts vs. OG candlesticks: know what's up, or your account might look like a crime scene, bleeding red. 💀

With those OG Japanese candlestick charts, each candle’s got your basic open, high, low, and close within the current timeframe. 🔍

But Heikin Ashi charts, wowy, each candle throws in some past-price-deets too! 📈

Uh, say what? 🧐

Let's flex those brain muscles and break down a Heikin Ashi candle, one step at a time.

First off, let's pull up a Heikin Ashi chart for GBP/JPY as our cheat sheet:

Spot the difference? Though looking like OG candlesticks, those opens and closes are born different! 🔥

Just like the classic Japanese candle, Heikin Ashi has its own open, close, high, and low.

Which means there are FOUR pillars in the Heikin Ashi formula, fam:

The OPEN of a Heikin Ashi candle rides on the MIDPOINT of the last candle. 🕯️

Zoom in on the chart, you'll see each new candle pops off from the middle of the old one. 😯

Open = [(Open price of previous candle) + (Close price of previous candle)] / 2

The CLOSE of each Heikin Ashi candle vibes with the squad average of open, close, high, and low:

Close = (Open + High + Low + Close) / 4

The HIGH of a Heikin Ashi candle is about that peak life of the period. Could be the shadow, open, or close, whatever's the peak. 📈

High = Maximum Price Reached

The LOW of a Heikin Ashi candle digs into the low life. Shadow, open, or close—whatevs is the lowest. 📉

Low = Minimum Price Reached

What’s the T on these Heikin Ashi candles? They smooth things out like some oat milk latte action. ☕

Most of that market noise y'all see with traditional charts? Yeah, Heikin Ashi says bye-bye to it. 🚫

Here’s your quick recap of the Heikin Ashi vibes:

Heikin Ashi Formula:

High = Maximum of High, Open, or Close (whichever is highest)
Low = Minimum of Low, Open, or Close (whichever is lowest)

Open = [Open (previous bar) + Close (previous bar)] /2
Close = (Open + High + Low + Close) / 4