HA Candles.

I am a price action trader by nature and have always resisted indicators overall, but the reality is even a Japanese candlestick is an indicator. The nice thing about HA candles is that you can apply price action analysis to them to get a good idea of where price may go. Price action for an HA chart is a little different but there are some similarities.

For one a long wick signifies rejection of a level just like regular candles. Also the wick shows the high and low so in the case of an uptrend upper wicks are not bad because they are reaching for new levels but we would not want to see long wicks on the bottom because that would mean price is pushing downward. Likewise in the case of a downtrend we would not want to see large upper wicks.

When we see a long wick up and a long wick down with a small body than it means the exact same as a doji and there is indecision in the market.

Small bodies are less significant than larger bodies.

Here is a breakdown of the basics to reading HA candles

Trend Intensity Bullish Trend (Price rising)

Normal Bullish candle bodies.

Strong Bullish long candle bodies
without lower wicks.

Weak Bullish shorter candle bodies
without lower wicks.

Consolidation Series of small bodies
with upper and lower wicks.

Trend Intensity Bearish Trend (Price falling)

Normal Bearish candle bodies.

Strong Bearish long candle bodies
without upper wicks.

Weak Bearish shorter candle bodies
without upper wicks.

Consolidation Series of small bodies
with upper and lower wicks.

Because of the average nature of the HA when there is a strong trend it is very easy to see because a bulk of the candles will be blue or red. Unlike regular candlesticks where the candles go back in forth in color the HA’s may be blue or red throughout the whole move.

You can use support and resistance or any significant levels normaly. Consolidations look the same as well as most different patterns we would look for. Using HA candles is an adjustment but I feel it has many advantages and along with a sensible trading plan can offer us an edge in the market.