Heikin Ashi Calculation
The Heikin Ashi chart smooths price action by calculating average values. The chart calculates its open (HAO), high (HAH), low (HAL), and close (HAC). It uses the actual open (O), high (H), low (L), and close (C) of the time frame (like one minute, five minutes, or 15 minutes).
Advantages of Heikin Ashi
Although the Heikin Ashi chart does not show the exact price at all times, there are benefits to using these charts. The main advantage is that they look more “smooth,” which helps in identifying the direction of the trend more easily. Heikin Ashi charts are colored in the same way as candlesticks. As long as the price is rising (based on the calculations), the bars will appear green (or any color you choose). As long as the price is falling (based on the calculations), the bars will appear red (or any color you choose).
Using Heikin Ashi Charts
Heikin Ashi charts can be used in the same way as any other chart, to find chart patterns such as triangles and parallel triangles or trading setups. Entry and exit points might vary slightly compared to using a candlestick chart, as the price on the Heikin Ashi chart may be slightly different from what is present on the candlestick chart.
Conclusion
There is no one type of chart that is better than another. Instead, some traders prefer Heikin Ashi charts because they help isolate the trend better and are not choppy in appearance, while others prefer the additional detail and precise pricing of standard candlestick or bar charts.
Source: https://www.thebalancemoney.com/heikin-ashi-chart-basics-1031191
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