As you have already chosen this topic to read, we assume that you already know about candlesticks and their alternative Heiken Ashi. They are more like blood brothers because they share many common functionalities. However, beyond these common features, these charts greatly differ from each other when it comes to the core concepts they deploy and the situation they are invented for. In this article, we will excavate deeply and learn all the factors that make both these charts different.
The distinction between Candlesticks and Heiken Ashi Charts
Before understanding the difference between these two charts, a trader should know about the different situations they are used for. A candlestick comes in handy to sort out whether to execute a particular trader at a given time or let the trade pass. On the other hand, a Heiken Ashi plays its role when a trader has already got himself into a trade and needs further navigation about the market directions.
Heiken Ashi charts help a trader understand the condition of trade. It makes the person make his decision on leaving or staying with the current trade. After perceiving the difference that these candlesticks and Heiken Ashi are used for, traders should look into their structural differences. The best way to understand such a difference is to juxtapose two pictures of both these charts and play the find the difference game with them.
If anyone does it, he will see that in a Heiken Ashi chart, navigational moves are slicked out in a way absent in a candlestick chart. Candles or sticks on a Japanese candlestick graph often transform from green to red or often change from upward to downward and vice versa. This feature makes such charts hard to read and understand. To experience the real difference, you should use this link and get a demo account from Saxo.
Conversely, candles on a Heiken Ashi display comparatively more consecutive colored. It helps traders to recognize various past movements more effortlessly. Another difference between these charts is that one is a bit harder to contemplate than the other one.
Any trader can notice that Heiken Ashi charts have a general tendency to keep their sticks remain green when an uptrend is playing in the back and remain red when a downtrend is continuing. This is totally in contrast to conventional candlesticks that different change color even when the market is moving robustly in one direction. There will be a time when traders will have no idea about the reasons for a color change.
Representation of the price movements
In terms of price analysis, Heiken Ashi is much smoother than the candlestick. That is why numerous traders prefer deploying the former one since it plummets the market noise and a trader’s pain and time on understanding the chart. It makes them put more time and effort into making reasonable and profitable decisions.
The prime factor that makes a candlestick different from a Heiken Ashi is the way they display the price in the context of the close and the open. If anyone looks closely enough at the HA, he will notice that every HA stick begins from the mid of another stick that is right behind it, and never from the place where the past stick has closed.
Sticks in a HA graph acts this way for a special reason. The reason lies in the procedure that gets used to estimate and calculate those sticks.
However, no matter how elegant these HA charts may sound to a trader’s ear, they can never replace candlesticks. Because regardless of the complication made by the traditional candlesticks, they are still overhauling the efficacy of HAs when it comes to indicating the ideal entry point.