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2004issue C021-12

Reconstructing Heikin-Ashi bars from smoothed OHLC

Archive listings rebuild Heikin-Ashi from the arithmetic mean of the raw open, high, low, and close, then write the modified open in several ways. The open may be a recursive midpoint, a half-weight adaptive moving average, or a short exponential average of that mean.

  • The modified close is the arithmetic mean of the raw open, high, low, and close.
  • The modified high is the maximum of the raw high and the modified open and close; the modified low is the matching minimum with the raw low.
  • Listings write the modified open as the average of the prior modified pair, a 0.5-weight adaptive moving average of the prior modified close, a 3-period exponential average of the four-price mean, a one-bar-lagged exponential smoothing of the modified close, or the prior raw open and close.
  • A companion series subtracts the modified open from the modified close and overlays a 3-period moving average of that difference; a discrete rule then marks buy, sell, or neutral against a 5-period simple moving average of the modified close.
Entries in this reading3 entries
Current trackHeikin-Ashi17 readingsExponential smoothing183 readingsMoving average597 readings

A rebuilt candle

Archive listings treat Heikin-Ashi as a modified candle, not as the raw open, high, low, and close. The modified close is the arithmetic mean of those four raw prices. The modified high is the maximum of the raw high and the modified open and close. The modified low is the matching minimum with the raw low.

How the open is written

The modified open is the average of the previous modified open and the previous modified close. One listing writes the modified open as a 0.5-weight adaptive moving average of the prior modified close. Another listing writes the modified open as a 3-period exponential average of the four-price mean and treats that average as equivalent to averaging the prior modified open and close.

A further construction states that the modified open is a one-bar-lagged exponential smoothing of the modified close, and therefore of the whole bar. At least one listing sets the modified open from the prior raw open and close rather than from the prior modified pair.

ULTI Heikin-Ashi open versus the four-price close

The modified open is a lagged smoother of the four-price mean: it stays below that mean on the February–March 2002 advance and does not follow the early-February or late-March spikes lower. Readings come from the daily ULTI haOpen and haClose lines on the NeoTicker screenshot.
The modified open is a lagged smoother of the four-price mean: it stays below that mean on the February–March 2002 advance and does not follow the early-February or late-March spikes lower. Readings come from the daily ULTI haOpen and haClose lines on the NeoTicker screenshot.ULTI · daily · 2001-12-10T00:00:00.000Z to 2002-03-22T00:00:00.000Z

Digitized from the plotted lines to the nearest five cents. Listings write haClose as (O+H+L+C)/4 and haOpen as a one-bar recursive midpoint or half-weight average of that mean.

The overlay and the discrete rule

A companion series subtracts the modified open from the modified close and overlays a 3-period moving average of that difference. A discrete rule marks a buy when the modified close-open difference is positive and the modified close is above its 5-period simple moving average, a sell when both comparisons fail, and neutral when the two conditions disagree.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
1 of 16 in the Heikin-Ashi track
20041-8 pp.Next on Heikin-AshiHeikin-Ashi candle construction as an OHLC transformHeikin-Ashi replaces each raw bar with constructed open, high, low, and close values so trend and pause states are easier to see than on ordinary candles.
All readings on this track · 16 readings
  1. 2004Reconstructing Heikin-Ashi bars from smoothed OHLC
  2. 2004Heikin-Ashi candle construction as an OHLC transform
  3. 2004Stacking heikin-ashi, swing charts, and a moving average in strong trends
  4. 2007Constructing a Heikin-Ashi volume-price oscillator
  5. 2007A volume-price oscillator is a timing trigger, not a standalone entry
  6. 2008Heikin-Ashi OHLC construction and simplification
  7. 2008How a Heikin-Ashi candlestick oscillator is built from color, lag, and hold rules
  8. 2008Heikin-Ashi color-coded candles and smoothed trend filters
  9. 2010Heikin-Ashi smoothed percent b for divergence timing
  10. 2011Constructing Heikin-Ashi, moving-average, and MACD filters
  11. 2011Constructing candlestick, Elliott-wave, and Heikin-Ashi hypotheses
  12. 2012Constructing a three-state Heikin-Ashi trend filter
  13. 2012Heikin-ashi as a trend-state signal without candlestick-patterns
  14. 2013Heikin-Ashi volume gates, smoothing, and denominator floors
  15. 2013How Heikin-Ashi close and typical-price form a two-average crossover
  16. 2013Walk-forward tests for color-coded Heikin-Ashi crosses
By fieldIndicators and filters874 readingsBy year2004180 readings
All 17 readings tagged Heikin-Ashi
Also on Heikin-Ashi5 readings
2008How a Heikin-Ashi candlestick oscillator is built from color, lag, and hold rules2008Heikin-Ashi color-coded candles and smoothed trend filters2013Heikin-Ashi volume gates, smoothing, and denominator floors2004Heikin-Ashi candle construction as an OHLC transform2004Stacking heikin-ashi, swing charts, and a moving average in strong trends