A Heikin Ashi chart shows you the direction of a trend through its color-coded candles.
A green candle is telling you that the trend is UP. A red candle is telling you that the trend is DOWN.
A Heikin Ashi chart shows you the strength of the trend by observing the shadows (or wicks).
These candlesticks do not show a shadow in the OPPOSITE direction of the trend.
When there is no shadow, this means you’re in a strong trend.
So the main thing you want to look for on a Heikin Ashi chart to determine trend strength is shadowless or wickless candlesticks opposite the trend.
Depending on which end lacks a shadow, there’s a name for each type of shaved candle.
“Shaved butt” would’ve been a better name in our opinion. 🤣
If there is no upper shadow/wick, also known as having “no head”, the candle is called a “shaved head“.
Technically, the color of the candle does NOT matter, as long a candle lacks a tail or head.
But for the purposes of Heikin Ashi, we want to see shaved bottoms that are green and shaved heads that are red since we’re looking for trend strength.
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