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Heikin Ashi4MetaStock V1.0 - Converts MetaStock price data files to Heikin Ashi format
Heikin Ashi4MetaStock is a software program that allows Metastock users to create and update Heikin Ashi data files in MetaStock. The program creates data files with modified open, high, low, close values and according to the computation rules for Heikin-Ashi trend technique. Once these data files are created/updated, they can be displayed as Heikin Ashi trend charts in Metastock using the candlestick representation.

The directory with the original data files will not be modified. The program creates a new directory containing all the securities of the original directory and modifies the open, high, low and close values. As soon as you add new records to the original data directory Heikin Ashi4MetaStock will recognize the changes and will automatically update the data files in directory containing the Heikin Ashi values.

You can update the original MetaStock directory with any program you want. Heikin Ashi4MetaStock automatically detects the changes and will update the MetaStock directory containing the Heikin Ashi values. So you always have two consistent MetaStock directories although you have to service only one MetaStock directory. One directory contains the original the OHLC values, the second one contains the modified OHLC values.


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Heikin Ashi Information

Most profits (and losses) are generated when markets are trending -so predicting trends correctly can be extremely helpful. Many traders use candlestick charts to help them locate such trends amid often erratic market volatility. The Heikin Ashi technique -"average bar" in Japanese - is one of many techniques used in conjunction with candlestick charts to improve the isolation of trends and to predict future prices.

Calculating the Heikin Ashi Bars

Normal candlestick charts are composed of a series of open-high-low-close (OHLC) bars set apart by a time series. The Heikin Ashi technique uses a modified formula:

 xClose = (Open+High+Low+Close)/4
Average price of the current bar

 xOpen = [xOpen(Previous Bar) + xClose(Previous Bar)]/2
Midpoint of the previous bar

xHigh = Max(High, xOpen, xClose)
Highest value in the set

xLow = Min(Low, xOpen, xClose)
Lowest value in the set

 Constructing the Chart

The Heikin Ashi chart is constructed like a regular candlestick chart (except with the new values above). The time series is defined by the user depending on the type of chart desired (daily, hourly, etc.). The down days are represented by filled bars, while the up days are represented by empty bars. Finally, all of the same candlestick patterns apply.

Here is a normal candlestick chart:


(Candlestick chart)

 Here is a Heikin Ashi chart:

 
(Heikin Ashi chart)

There are five primary signals that identify trends and buying opportunities:

Hollow candles with no lower "shadows" indicate a strong uptrend: let your profits ride!

Hollow candles signify an uptrend: you might want to add to your long position, and exit short positions.

One candle with a small body surrounded by upper and lower shadows indicates a trend change: risk-loving traders might buy or sell here, while others will wait for confirmation before going short or long.

Filled candles indicate a downtrend: you might want to add to your short position, and exit long positions.

Filled candles with no higher shadows identify a strong downtrend: stay short until there's a change in trend.

These signals show that locating trends or opportunities becomes a lot easier with this system. The trends are not interrupted by false signals as often, and are thus more easily spotted. Furthermore, opportunities to buy during times of consolidation are also apparent.

    
 
 
 
 
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