Heikin-Ashi candlestick charts look very similar to regular candlestick charts but differs because of the used formula to calculate and draw the candlesticks.
Heikin-Ashi Used Formula
Close = (Open+High+Low+Close)/4
Open = [Open (previous bar) + Close (previous bar)]/2
High = Max (High,Open,Close)
Low = Min (Low,Open, Close)
Advantages of using Heikin-Ashi candlesticks
Heikin-Ashi candlestick charts react much slower to high volatility than a regular candlestick chart.
They tend to significantly reduce the amount of whipsaws/fake signals because of the built-in delay.
This creates a great tool to trade highly volatile currency pairs such as the GBP/JPY.
EUR/USD Daily Chart Example
How to install the Heikin Ashi custom indicator in Metatrader 4?
- Download the Heikin-Ashi.mq4 indicator to your computer.
- Open your Metatrader 4 platform.
- Open the data folder from the top menu.
- Open the MQL4 folder.
- Open the indicators folder.
- Paste the indicator file in this folder.
- Restart the trading platform.
- Open any trading chart.
- Attach the indicator to the chart.