Constructing a Three-Stage Moving Average from Heiken Ashi Closes

Summary

This indicator description defines a moving average built from Heiken Ashi candle values. It exposes two settings: the calculation period and the averaging method. First, it calculates a moving average of the Heiken Ashi close; it then applies the same moving-average operation to that result twice more, producing a three-stage smoothed series.

The document gives formulas for deriving Heiken Ashi close and open values from standard open, high, low, and close data, along with the preceding Heiken Ashi open. This explains the inputs to the smoothing calculation, but the note does not describe how to interpret the resulting line, specify trading rules, or provide tests of its behavior. It is therefore a description of an indicator construction rather than a complete strategy. Results will depend on the chosen period and averaging method, neither of which is prescribed.

Key ideas

• The indicator applies a moving average three times, beginning with the Heiken Ashi close.
• Its configurable inputs are the averaging period and method.
• Heiken Ashi values are derived from standard candle prices and prior Heiken Ashi values.
• The note defines the calculation but gives no entry rules or performance evidence.
• The chosen period and averaging method affect the resulting smoothed series.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.