In this tutorial, you will learn how to create an Heikin Ashi Stock Chart in Excel.
Don’t you know what a Heikin Ashi chart is?
What is the Heikin Ashi Stock Chart
The Heiken Ashi chart, which is a variant of the traditional Candlestick chart, is undoubtedly little known to traders.
Calculated in the way that we will immediately see, the Heiken Ashi graph has the advantage of filtering much of “noise” of the market, or those short or very short period movements that tend to distort the underlying trend of a financial instrument by deceiving the less experienced trader.
Heiken Ashi does not exist either lap or gap, and the same occurs continuously without interruptions of any kind.
The Heikin Ashi Excel Chart is a versatile tool that filters the noise, predicts reversals, and identifies classic chart patterns.
All aspects of classical technical analysis can be applied to these graphs. Also, all charts can use HAs to identify media and resistors, plot trendlines, or measure retracements.
Volume indicators and momentum oscillators also work well.
How to calculate the Heikin Ashi Excel Stock Chart
This peculiarity derives from the particular method of construction of the Heiken Ashi (HA) candles:
The Heikin Ashi Close is a sort of average of the current candle
Close_HA = (Open + Max + Min + Close) / 4.
The opening of the HA corresponds to the average of the body of the previous candle
Open_HA = (Open_HA + Close_HA) / 2.
The Heikin Ashi Maximum is the highest value between the (Max, Open and Close of the current bar always calculated by the HA method as seen in points 1 and 2 above
Max_HA = Max (current bar Maximum, Open_HA, Close_HA).
The HA minimum is the lowest value between the (current bar Minimum, Open_HA, Close_HA and closing of the current bar always calculated by the HA method as seen in points 1 and 2 above
Min_HA = Min (Current Bar Minimum, Open_HA, Close_HA).
The color of the Heikin Ashi Excel Chart candles is red during a DownTrend and green during an UpTrend.
A particular indication of a potential change in trend is provided precisely by the change in color of the HA candle, mainly if this occurs in the presence of a Doji candle.
The color change of Heikin Ashi Excel Stock Chart candles can be used operationally to enter the position, with the help of some filters such as a simple moving average or an indicator.
Indian Stock Market Example
Let’s take a quick look at an example; many readers of our site have asked us where to look at the Indian actions of Nifty 50.
We have created a small tutorial that speaks specifically about Indian market shares; you can find it at this link.
Let’s take as an example a stock of the Indian market and Nifty 50, YESBANK.
YESBANK is an Indian private bank founded by Rana Kapoor and headquartered in Mumbai. You will hardly find this title on your trading or analytics platforms, and so if you want to analyze it, you will need to do so on Excel.
On Yahoo Finance, we extract all data relating to YESBANK through this tutorial.
To draw a Heikin Ashi Excel Stock Chart, we will need more than OHLC prices; you will need to take further steps and create formulas for it.
Firstly, insert four new rows and name them as follows:
The High_HA and Low_HA cells should be calculated after calculating Open_HA and Close_HA.
You will need to pay attention to the first line of Oen_HA that will always be the same as the Open because it is the basis for the calculation.
Then in cell F2 you will write =B2
Then you will have to insert the formulas like this in the cells indicated:
I2 = (B2 + C2 + D2 + E2) / 4
G2 = MAX (C2, F2, I2)
H2 = MIN (D2, F2, I2)
F3 = (F2 + I2) / 2 (you start with cell F3 because in F2 you have already entered the function =B2)
At this point, copy the cells with the functions created throughout the row, remember to pay attention to cell F2, which will not need to be modified.
Once all the data has been entered, select dates and then use the CTRL key to select the cells Open_HA, High_HA, Low_HA, Close_HA, and then click on insert chart and choose the Japanese candlestick chart.
Here’s what the graph will look like.
All you have to do is change the colors like this:
Select the graph and then on the right in “Chart Area format” locate Down_Bars 1 and Up-Bars 1 and go to select them and change their color as follows:
Your Heikin Ashi Excel Stock Chart is ready!