The Rise of The Heikin-Ashi RSI in Trading Strategies

Unleashing the Power of the Heikin-Ashi RSI for Dynamic Market Movements

Sofien Kaabar, CFA
5 min readJun 11, 2024

--

This article presents a new idea on combining Heikin-Ashi techniques with the well-known RSI.

The Main Components of the Indicator

The RSI is a momentum oscillator, a fancy term for a tool that measures the speed and change of price movements. It ranges from 0 to 100 and is typically displayed below a price chart.

Imagine the RSI as a traffic signal for stocks. When it’s high (usually above 70), it’s like a red light, suggesting the stock might be overbought. This could mean it’s time for a potential reversal or at least a pause in the upward trend. Conversely, when the RSI is low (usually below 30), it’s like a green light, signaling that the stock might be oversold. This could indicate a potential buying opportunity, as the price might be due for a bounce.

RSI

Heikin-Ashi, Japanese for “average pace,” is a different way of representing price movements on a chart. Unlike traditional candlesticks, Heikin-Ashi candles use a formula to average…

--

--