Now that you have learned how to measure the Heikin Ashi candles, let's explain how to use and read the Heikin Ashi candlestick chart. The idea behind using the Heikin Ashi chart is that it filters out market noise. And since the noise is filtered, you see a clear trend. Since Heikin Ashi candles are calculated based on averages, candles will have smaller shadows (wicks) than regular candles.

Green candles without a lower shadow signal a strong TREND.
Red candles with no upper shadow signal a strong LOWER TREND.

Haykin Ashi charts are used by technical traders to define:

So, if your destination is near trends and rides them for as long as possible, you might want to learn how to use the Heikin Ashi chart.

What is a Point and Figure (P&F) Chart?

A point and figure chart consists of several columns, with crosses indicating an increase in the price of a security and O symbols a price decline. Column X is always followed by a column from O, and vice versa. The chart consists of several blocks, each of which corresponds to a certain price level. The field is filled with an X if the price rises to this level. The field is filled with the letter O if the price drops to this level.

P&F charts are considered “timeless” because, unlike traditional charts, time does not matter. In traditional charts, the price of a security is displayed for specific time intervals, even if the price does not change. When using P&F charts, new information is displayed on the chart only in case of price movement, price change. If the price is static even for a long period, the chart remains unchanged. These charts are a useful tool in technical analysis, especially useful for identifying support and resistance levels.

A popular method for building P&F charts is a three-cell spread. This is a filtering process that requires filling in at least three squares before flipping the current column in the chart and starting a new one in the opposite direction.

Benefits of P&F Charts

Although a P&F chart is one-dimensional in the sense that it focuses only on price changes and not time, it can offer several benefits to traders and analysts. Benefits include:

• Filtering out minor price action - market noise
• Easy visualization of support and resistance levels
• A timeless tool for price movement analysis
• Helps a trader to focus on the import price movements

Using Renko Charts in Your Trading

Renko charts are a way of viewing the price movement of an asset that filters out minor price movements. Since these small swings are eliminated, price trends can be easier to spot, and this feature makes Renko charts the preferred price chart for some traders.

Renko charts are also easier to read because the markers on the chart, called cubes, rectangles, or blocks, are more uniform compared to the candlestick charts that other traders prefer to use to track price movements. However, this simplification comes at a cost as some pricing information is lost.

Author's Bio: 

Avinash Mittal is a digital marketing professional with over 4+ years of experience. Presently, he is vigorously rendering and polishing off his versatile skills in the field of Search Engine Optimization (SEO), Facebook Ads, Content Scrapping and content marketing.