Heiken Ashi

[shapebubble]

Hi 

I've been doing some research into the Heiken Ashi indicator and I must be misunderstanding how it is calculated because the results I get don't tally with the values on IG. Here's the formula I used from IG's own website:

• Calculate the open = (open of previous bar + close of previous bar) divided by 2
• Calculate the close = (open + close + high + low of current bar) divided by 4
• Calculate the high = the maximum value from the high, open, or close of the current period
• Calculate the low = the minimum value from the low, open, or close of the current period

If you take this calculation and implement it on IG data (or ctrader for that matter) you get slightly different results.

Often when looking at the Heiken ashi indicator the candle does not develop a wick on one end when the trend starts to pick up pace. I can't get that it happen if I take the data and then calculate my own heiken ashi.

The reason why I want to know is because I am trying to do some back testing on Excel.

 

Looking forward to hearing your input

 

All the best

 

Adam

 

[Kodiak]

"Before moving to a spreadsheet example, note that we have a chicken and egg dilemma. We need our first Heikin-Ashi candlestick before we can calculate future Heikin-Ashi candlesticks. "

https://school.stockcharts.com/doku.php?id=chart_analysis:heikin_ashi

 

[shapebubble]

Ah ha, that makes more sense thanks for the article