Using Heiken Ashi Values in a Smoothed Price Oscillator

Summary

This indicator is described as a price oscillator that uses Heiken Ashi values rather than raw prices to represent trend direction and strength. It adds a signal line that can be compared with the oscillator through crosses, following a familiar oscillator-style signal approach.

The signal line also smooths the oscillator, whose values are characterized as changing quickly. Smoothing may filter some false signals, but it introduces lag, so any reduction in noise can come at the cost of later responses to market changes. The description does not specify the calculation, smoothing settings, entry or exit rules, or the assets and timeframes for which it is intended. It includes no examples, testing, or performance evidence, so it explains the design rationale rather than establishing that the indicator is predictive or profitable.

Key ideas

• The oscillator uses Heiken Ashi values to represent trend and its strength.
• A signal line can be used to identify crosses with oscillator values.
• Smoothing is intended to reduce rapid fluctuations and some false signals.
• The signal line’s smoothing can introduce lag.
• No calculation details or empirical results are provided.

Tags

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