There is an exciting addition to your trading arsenal in MultiCharts 7 – Heiken-Ashi chart type.
In some markets, there is a lot of ‘noise’, or price movements that are just random, and which do not indicate any pattern or trend. Traders need to find certain patters to make trading decisions, and some use tools such as the Moving Average indicators to look past the volatility. Heiken-Ashi charts are very useful for displaying price movements without the ‘noise’, and they offer an easy-to-read way for better analysis. Heiken-Ashi means “average bar” in Japanese, it’s a chart type that draws averaged candlesticks to help eliminate random price volatility and help you identify true trends in the market. Heiken-Ashi bars are calculated based on the previous bar, which ‘smooths’ them out. Check it out in MultiCharts 7 Beta 2!
For the first Heiken-Ashi Bar: haOpen = Open
For other Heiken-Ashi bars: haOpen = (haOpen (previous bar) + haClose (previous bar)) / 2
Each consequent bar is started at the middle point of the previous bar.
haClose = (Open + High + Low +Close) / 4
Average price of the current bar in the base resolution
haHigh = Maximum(High, haOpen, haClose)
Maximum value out of: today’s real High, haOpen or haClose.
haLow = Minimum(Low, haOpen, haClose)
Minimum value out of: today’s real Low, haOpen or haClose.
If haOpen <= haClose the Up color is used, otherwise the Down color is used.
When working with mathematical division, rounding according to the Price Scale is performed.
Example: Price Scale = 1/100 and Min Move = 25, if haOpen = 0.75 and haClose = 0.50, then haOpen of the next bar =
(0.75 + 0.50)/2 = 0.625 and it’s rounded to 0.63 (since Price Scale = 1/100).