Heiken ashi

There are five primary signals that identify trends and buying opportunities:

Hollow or green candles with no lower "shadows" indicate a strong uptrend: Let your profits ride!
Hollow or green candles signify an uptrend: You might want to add to your long position and exit short positions.
Candles with a small body surrounded by upper and lower shadows indicate a trend change: Risk-loving traders might buy or sell here, while others will wait for confirmation before going long or short.
Filled or red candles indicate a downtrend: You might want to add to your short position and exit long positions.
Filled or red candles with no higher shadows identify a strong downtrend: Stay short until there's a change in trend.
These signals may make locating trends or trading opportunities easier than with traditional candlesticks. The trends are not interrupted by false signals as often and are thus more easily spotted.

What Does Heikin-Ashi Tell You?
The Heikin-Ashi technique is used by technical traders to identify a given trend more easily. Hollow white (or green) candles with no lower shadows are used to signal a strong uptrend, while filled black (or red) candles with no upper shadow are used to identify a strong downtrend.

Reversal candlesticks using the Heikin-Ashi technique are similar to traditional candlestick reversal patterns; they have small bodies and long upper and lower shadows. There are no gaps on a Heikin-Ashi chart as the current candle is calculated using information from the previous candle.

Because the Heikin-Ashi technique smooths price information over two periods, it makes trends, price patterns, and reversal points easier to spot. Candles on a traditional candlestick chart frequently change from up to down, which can make them difficult to interpret. Heikin-Ashi charts typically have more consecutive colored candles, helping traders to identify past price movements easily.

The Heikin-Ashi technique reduces false trading signals in sideways and choppy markets to help traders avoid placing trades during these times. For example, instead of getting two false reversal candles before a trend commences, a trader who uses the Heikin-Ashi technique is likely only to receive the valid signal.