This article has been translated from English to Gen Z Slang.
How do you use Heikin Ashi? 🤔🔥
Now that you’ve peeped the scoop on calculating Heikin Ashi candlesticks, let’s vibe about how to use and read a Heikin Ashi candlestick chart. 💡
The main gig with a Heikin Ashi chart is it filters market noise like turning down the volume on unnecessary drama.
And cuz the noise is benched, you basically see the bare trend in full HD. 📉✨
Because Heikin Ashi candlesticks are all about those averages, they got smaller shadows (wicks) than the OG Japanese candlesticks. ⬇️
Same deal as with Japanese candlesticks: with a Heikin Ashi candlestick, the smaller the shadow a.k.a. wick, the more BAE the trend. 💪Green candles with no lower shadow? Straight-up UPTREND goals. 📈
Red candles without an upper shadow? That's a savage DOWNTREND. 📉
Heikin Ashi charts are the radar for technical traders to SPOT that:
- Trend DIRECTION 💡
- Trend STRENGTH 💪
So if you’re trying to hop on trends and ride them out like you're coasting down a wave, you probs wanna know how to chart it up with Heikin Ashi. 🌊
How to Use Heikin Ashi to Identify Trend Direction
A Heikin Ashi chart is giving you trend tea via its color-coded candles. 🎨
A green candle? The trend is UP. A red candle? The trend's DOWN. Simple AF. ☝️👇
How to Use Heikin Ashi to Identify Trend Strength
A Heikin Ashi chart flexes trend strength by if the shadows (or wicks) pull an invisibility act. 🚫👀
You'll see for many of the green candles, there's no lower shadow or wick. 💚🧙♂️
Same goes for red candles. Many don’t flex any upper shadows or wicks. 🔴These candlesticks don’t show a shadow in the OPPOSITE direction of the trend. 🚫🔄
No shadow? You're on that strong trend train. 🚂💨
So the main deets you wanna look for on a Heikin Ashi chart to peep trend strength are candlesticks without shadows or wicks opposite the trend.
Candlesticks without a shadow or wick on one end are also known as “shaved candles”. 🪒🔥
Depending on which end is missing a shadow, they got unique names.
If there’s no lower shadow/wick, also known as having “no tail,” we call it “shaved bottom.” 🧔♂️👀
“Shaved butt” would've been a total mood. 🤣🔥
If there’s no upper shadow/wick, a.k.a. “no head,” then it’s a “shaved head.” 🎩✨
Technically, candle color ain’t that deep, but while talking Heikin Ashi, we stan green shaved bottoms and red shaved heads if we’re tracking trend strength.🟢🔴