Smoothed Heiken Ashi Signals with Average and Step Filters

Summary

This indicator variation calculates Heiken Ashi values from smoothed or filtered prices rather than raw prices. The document presents smoothing as a way to reduce some false signals and make the indicator easier to use. It offers four averaging choices: simple, exponential, smoothed, and linear weighted moving averages. A separate step filter can suppress small value changes below a selected pip threshold; disabling the threshold turns that filter off.

Instead of displaying the usual price-based candle representation, this version outputs a binary direction value: positive one for an upward trend and negative one for a downward trend. That compact output is intended to make the indicator usable by automated trading systems. No formula details, threshold recommendations, backtest results, or comparison against unsmoothed Heiken Ashi are supplied. Smoothing and step filtering may reduce frequent changes, but the description does not show whether they improve predictive performance or how much lag they introduce.

Key ideas

• The indicator applies averaging to prices before calculating Heiken Ashi values.
• It supports simple, exponential, smoothed, and linear weighted averages.
• A pip-based step filter can ignore changes below a chosen threshold.
• The output is a binary trend signal, with positive one for up and negative one for down.
• No tests or parameter guidance establish the signal's predictive value or lag.

Tags

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