What are Heikin Ashi candles?

Heikin Ashi is a variant of Japanese candlesticks that redraws each bar with averaged prices. The candles keep the body and wicks of regular candlesticks, but their color follows the trend rather than every swing. The drawing at the top of this page shows one move both ways: mixed green and red regular candles on the left, a clean run of green Heikin Ashi candles on the right, then small two-sided candles and a red one at the turn.

The name is Japanese: heikin means average or balance, and ashi means foot or bar, so “average bar” is the usual translation; some sources render it as “average pace”. The method became widely known among Western traders after Dan Valcu’s article “Using The Heikin-Ashi Technique” in the February 2004 issue of Technical Analysis of Stocks & Commodities. You will also see it spelled Heiken Ashi.

The Heikin Ashi formula: four lines

Each Heikin Ashi (HA) candle is built from two inputs: the current regular bar and the previous HA candle. The drawing below labels the four prices of a regular candle, the open, high, low and close, which the four lines rework.

The first HA candle has no predecessor, so charting software seeds it, commonly with an open at the average of that bar’s open and close. The seed fades after several bars, but every HA candle carries a little of the ones before it.

  • HA close = (open + high + low + close) ÷ 4, the average of the current bar.
  • HA open = (previous HA open + previous HA close) ÷ 2, the midpoint of the previous HA body.
  • HA high = the highest of the bar’s high, the HA open and the HA close.
  • HA low = the lowest of the bar’s low, the HA open and the HA close.

Turn your phone sideways to read the drawing. Tap to close.

A hand-drawn green candle and red candle side by side, labeled with the body, the upper and lower wicks, and the open, close, high and low on each.

A worked example: what the smoothing hides

Hypothetical: the previous HA candle opened at $100.00 and closed at $101.00. The current regular 1-hour bar opens at $101.20, trades up to $102.40 and down to $100.90, and closes at $102.10. The HA close is ($101.20 + $102.40 + $100.90 + $102.10) ÷ 4 = $101.65. The HA open is ($100.00 + $101.00) ÷ 2 = $100.50. The HA high is $102.40, the real high, and the HA low is $100.50, the HA open itself.

That last detail is why strong uptrends print HA candles with no lower wick: the HA open sat below the bar’s real low, so it became the low. Now look at what this candle hides:

  • The HA close, $101.65, is $0.45 below the real close of $102.10. The last price on the chart is not a price you can trade.
  • The HA open, $100.50, never traded during this bar: the real low was $100.90.
  • Gaps disappear. Each HA candle opens at the midpoint of the previous body, so an overnight gap shows up as a longer candle, not as an empty space.
  • Wicks change meaning. A regular lower wick shows a rejection; a missing HA lower wick only says the HA open was below the bar’s low.
  • The rule: read the trend on HA candles, and set every entry, stop and target on real prices.

How to read Heikin Ashi candles: strong trend, indecision, reversal

Heikin Ashi is read by color, body size and which side has wicks, as in the three clusters in the drawing below. One candle means little; a run of several says more.

Hypothetical, daily chart: a stock climbs from $40 to $46 on eight green HA candles with no lower wicks. Near $46, two small candles with wicks on both sides appear: indecision, not yet a sell. A trader holding a long raises the stop under the last real swing low. If red candles with no upper wicks follow, the bias flips; if green resumes, nothing has changed.

  • Strong up: green candles with no lower wicks. The HA open is the low, so price never traded below the midpoint of the previous body. Trend followers stay in.
  • Strong down: red candles with no upper wicks. The HA open is the high, and sellers are in control.
  • Indecision: bodies shrink and wicks appear on both sides, often with alternating colors. It is the HA version of a spinning top or a doji: the trend has paused, and it may resume or turn.
  • Reversal: after indecision, a strong run of the opposite color, such as red candles with no upper wicks after an uptrend. One opposite-colored candle is not enough.

Turn your phone sideways to read the drawing. Tap to close.

Three hand-drawn Heikin Ashi clusters labeled strong up (green candles with no lower wicks), indecision (small bodies with wicks on both sides) and strong down (red candles with no upper wicks).

Why Heikin Ashi lags at turns

Each HA open is the midpoint of the previous HA body, which was itself built from the candle before it, so old prices keep pulling on new candles. That smooths the trend and delays the turn; TradingView’s help page on Heikin Ashi notes the same delay.

Hypothetical: a strong green HA candle runs from $104.00 to $106.00. The next regular bar opens at $106.50, peaks at $106.80, falls as low as $104.20 and closes at $104.50: a big red candle. Its HA close is ($106.50 + $106.80 + $104.20 + $104.50) ÷ 4 = $105.50 and its HA open is $105.00, so the HA candle is still green, a small body with wicks on both sides.

The bar after that opens at $104.40, reaches $104.60, drops to $103.00 and closes at $103.20. Now the HA open is $105.25 and the HA close $103.80: the first red HA candle, with no upper wick. A trader who waits for that color change to exit a long sells near $103.20, $3.60 below the $106.80 high. That is the cost of smoothing: HA confirms turns late, and against a small target the delay can take most of the move.

Pullback or reversal? Confirm with structure and levels

Inside an uptrend, red HA candles appear in every pullback, so color alone cannot tell a pause from a top. Check the swing structure on regular candles, as in the drawing below: an uptrend makes higher highs (HH) and higher lows (HL), and each break of a prior high (BOS, break of structure) confirms it. The trend is intact while each pullback holds above the last higher low.

The warning comes when price makes a lower high (LH) and then closes below the last higher low, marked CHoCH (change of character) in the drawing. A red HA run that lines up with that break, ideally at a known resistance, is a reversal worth acting on; a red run that stops above the last higher low, at support, is more often a pullback. See market structure and support and resistance.

Hypothetical: in an uptrend, the last higher low is $62.30. HA candles turn red as price slides to $62.90, then turn green again: the structure never broke, so the trend is intact. Another time, after a lower high, price closes at $61.80, below $62.30: now the red HA candles agree with the structure, and longs are out.

Turn your phone sideways to read the drawing. Tap to close.

A hand-drawn zigzag uptrend with swing points labeled HL, HH, HL, HH and a dashed line at each prior high marked BOS where price breaks it; then price makes a lower high (LH) and breaks below the last HL, marked CHoCH (change of character) in red, with notes reading uptrend and trend change?

A Heikin Ashi candles strategy: hold on HA, enter on real candles

Heikin Ashi is better at keeping you in a trend than at timing an entry. An entry needs a real price, a level and a closed candle, and TradingView’s own help page calls HA less precise for exact entry and exit levels. So split the job: regular candles for the entry, stop and target; HA for the decision to hold.

Hypothetical swing long on a 1-hour chart, as in the drawing below: a stock in an uptrend pulls back in small candles to a former breakout level at $48.00. A regular candle closes back up at $48.60; that close at the level is the confirmation. The stop goes under the pullback low at $47.70, $0.90 of risk per share. The target is the prior swing high at $50.40, $1.80 away: a 1:2 risk-reward ratio. Risking 1% of a $10,000 account ($100) allows 111 shares ($100 ÷ $0.90).

Then manage with HA. While the candles stay green with no lower wicks, hold. If two-sided candles show up before the target, raise the stop under the latest real swing low rather than exit on color. If price instead trades down to $47.70, the stop takes you out for about $100: the planned loss, whatever the HA colors say.

UpTickFlow, our invite-only TradingView indicator, follows the same split, so weigh this accordingly. It does not generate Heikin Ashi signals. It waits for a candle to close at a level, draws an entry, a stop and a target before the trade, scores the setup from 0 to 100 and stays quiet in chop: a second check, not a scanner.

  1. Read the trend on HA candles or a higher timeframe; see multi-timeframe analysis.
  2. On regular candles, wait for a pullback to a level and a close back in the trend direction.
  3. Stop beyond the real swing low, target before the next real level, size from the stop.
  4. Hold while HA stays strong; tighten on indecision.

Turn your phone sideways to read the drawing. Tap to close.

A hand-drawn uptrend pulls back in a few small, orderly candles, then a candle closes back up and prints a buy signal, with the target at the prior swing high.

When Heikin Ashi fails

Heikin Ashi fails often, and its failures are convincing because the candles look so clean. The most common one is a sideways market. Hypothetical: a stock ranges between $30.00 and $31.00 on a 15-minute chart. A run of green HA candles near $30.80 looks like a new uptrend, so a trader buys at $30.85; price stalls at $31.00 and falls back, red candles follow, and the trader sells at $30.30, a loss of $0.55 per share. Then it happens again from the other side. In a range, colors flip at every edge.

  • Chop and ranges: every color change looks like a fresh trend, so you buy near the top and sell near the bottom.
  • Sharp reversals and news: the lag can cost most of a move, and a gap through your stop fills at the real price, not the HA one.
  • Orders and backtests on HA prices: stops, limits and strategy fills at averaged prices may not match anything that traded.
  • Low timeframes: on 1- to 5-minute charts, HA still flips often, and the lag is large compared with small targets.
  • Reading one candle as a signal: a single red candle in an uptrend is usually a pullback; wait for the structure to break.

How to use Heikin Ashi on TradingView

Heikin Ashi is a chart type on TradingView, not an indicator. TradingView’s Help Center warns that strategies on non-standard charts such as Heikin Ashi use synthetic prices, so their backtest results typically do not reflect real market conditions. For Heikin Ashi, a strategy can still calculate on HA candles and fill orders at real prices: in 2023 TradingView added a Fill orders using standard OHLC option in the strategy’s Properties tab, and it is off by default.

  1. Open the chart type menu in the top toolbar and choose Heikin Ashi.
  2. By default the price scale shows two values, the real price and the HA price. Open Settings (the gear icon), go to the Symbol tab and tick Real prices on price scale to keep only the real one.
  3. Switch back to regular candles, or keep a regular chart open, before you place an order or draw a stop.
  4. If you test a strategy on a HA chart, tick Fill orders using standard OHLC first, and compare the results with the same strategy on regular candles.