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Heikin-Ashi Technique

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Heikin-Ashi Technique
A type of Candlestick chart that shares many characteristics with standard Candlestick charts, but differs because of the values used to create each bar.
    
Instead of using the Open-High-Low-close (OHLC) bars like standard Candlestick charts, the Heikin-Ashi technique uses a modified 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)
    
The technical traders use the Heikin-Ashi technique to identify a given trend more easily. Hollow candles with no lower shadows are used to signal a strong uptrend, while filled candles with no higher shadow are used to identify a strong downtrend.
    
This technique should be used in combination with standard Candlestick charts or other indicators to provide a technical trader the information needed to make a profitable trade.
Posted by  Privatebanking.com
 
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