Heikin Ashi candles and its affect on indicators, (an FYI more than a question)

RAClose

Experimenting with Heikin Ashi, I was surprised to discover that not only the candles change but also many if not all the indicators such as RSI, SloStoch, VTX, MACD, etc. However the Bollinger Bands seem to be consistent but the candle positions change; example, today with $twtr the regular candles for two days has been far above the bands but the Heikin candles are 50/50 or half in and half out. WHAT REALLY SURPRISED ME are the SMA and EMA's line position changes as well, including their cross overs. I found a discussion after posting this (I'm editing this) that is extremely helpful in understanding some of this science, several of whom I consider "Titan" posters contributed to it and its worth a read if you've missed it. https://scan.stockcharts.com/discussion/comment/7330#Comment_7330

lmkwin

A HA candle always starts at the midpoint of the prior HA candle. A regular candlestick has no plotting requirement in relation to the prior candle. There are no gaps in HA. There can be gaps galore on a candlestick.

I like HA for the clarity, but it can be confusing when you run a scan looking for an indicator break and then you look on the HA chart and start scratching your head as to why it showed up on the scan results. Then you flip it to a Candlestick, or Line or OHLC and you see why it showed up on the scan.

It would be nice to be able to run scans on HA values. If the scan engine allowed If Then Else statements, then it would be practical but those statements aren't allowed. I've figured a way to kind of work with Renko values on a scan but HA has eluded me so far.

On ACP you can create a synced dual pane setup to show the HA and Candlestick (or other styles) to see the comparison easier. On ACP you can also add other ACP only indicators like Hull's MA or Connor RSI. Only drawback there is you have to go to ACP. It's not my preferred place to be on StockCharts.com.

On Sharpcharts you can set a Price indicator for the symbol (parameter = $Symbol) and use HA for the primary chart and another chart type for the Price Indicator.

beeron

Yeah, I noticed that too with Parabolic SAR...I'd find stuff that had a "buy dot" in candlestick view but did not (yet) have one in HA view....

lmkwin

It's confusing at times. Like I mentioned, I haven't figured a decent HA method or trick I'm confident in yet. I don't spend much time on it though. Maybe something using a 2 day range midpoint, rising or falling in concert with an indicator value of choice. Need something to allow the lag to happen. Renko is easier because you can work with ATR or point values. HA is just a bit more complex, from a scanning perspective.