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MTR Investors Group provides technical and fundamental tools for stocks and option traders. Our advanced covered call and naked put screen is must have for option writers. We recently released our Stock Market Scout timing model which is based on the QQQ. Our legacy timing model MTR-TM which is... More
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  • Heikin-Ashi Candlestick Charts 1 comment
    Jan 3, 2010 2:20 PM | about stocks: QQQ, UNG, USO, DIA

    We are very please to release a new feature on MTR Investors Group the Heikin-Ashi Technique, developed by Dan Valcu, for creating candlestick charts. Once you start using Heikin-Ashi charts it is hard to use any other type of stock charts.   

    The heikin-ashi method {heikin means "average" or "balance" in Japanese, while ashi means "foot" or "bar") is a visual technique that eliminates irregularities from a normal chart, offering a better picture of trends and consolidations. Just by looking at a candlestick chart created with this method, you get a snapshot of the market's direction and strength.

    Compare the two charts below: PowerShares QQQQ Candlestick Chart vs. a Heikin-Ashi Chart.



    The heikin-ashi candlestick technique uses modified open-high-low-close (OHLC) values and displays these as candlesticks. The modified values are computed using these definitions:

     haClose = (O+H+L+C)/4
     haOpen = (haOpen (previous bar) + haClose (previous bar))/2
     haHigh = Maximum(H, haOpen, haClose)
     haLow = Minimum(L, haOpen, haClose)


    Scenario Trend Up Trend Down Trend
    1 Trend is Normal Rising green bodies Falling red bodies
    2 Trend gets Stronger Rising longer green bodies with no shadows Falling longer red bodies with no upper shadows
    3 Trend gets Weaker Candle bodies get smaller. Emergence of lower shadows Candle bodies get smaller. Emergence of upper shadows
    4 Consolidation Smaller bodies with both upper and lower shadows Smaller bodies with both upper and lower shadows
    5 Change of Trend Very small body with long upper and lower shadows Very small body with long upper and lower shadows


    You will only find these charts online at MTR Investors Group

    Stocks: QQQ, UNG, USO, DIA
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  • Stefan Martinek
    , contributor
    Comments (4) | Send Message
     
    Smoothed Heikin-Ashi bars definitely perform better than the base Heikin-Ashi bars. The test on the large portfolio research different averages http://bit.ly/178w1JI
    1 Apr 2013, 04:23 AM Reply Like
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