what is the heikin ashi technique 
the heikin ashi technique averages price data to create a japanese candlestick chart that filters out market noise heikin ashi charts developed by munehisa homma in the 1700s share some characteristics with standard candlestick charts but differ based on the values used to create each candle instead of using the open high low and close like standard candlestick charts the heikin ashi technique uses a modified formula based on two period averages this gives the chart a smoother appearance making it easier to spots trends and reversals but also obscures gaps and some price data the formula for the heikin ashi technique is heikin ashi close open 0 high 0 low 0 close 0 4 heikin ashi open ha open 1 ha close 1 2 heikin ashi high max high 0 ha open 0 ha close 0 heikin ashi low min low 0 ha open 0 ha close 0 where open 0 etc values from the current period open 1 etc values from the prior period ha heikin ashi begin aligned text heikin ashi close frac text open 0 text high 0 text low 0 text close 0 4 text heikin ashi open frac text ha open 1 text ha close 1 2 text heikin ashi high text max text high 0 text ha open 0 text ha close 0 text heikin ashi low text min text low 0 text ha open 0 text ha close 0 textbf where text open 0 text etc text values from the current period text open 1 text etc text values from the prior period text ha text heikin ashi end aligned heikin ashi close 4open0 high0 low0 close0 heikin ashi open 2ha open 1 ha close 1 heikin ashi high max high0 ha open0 ha close0 heikin ashi low min low0 ha open0 ha close0 where open0 etc values from the current periodopen 1 etc values from the prior periodha heikin ashi 