How are Heiken Ashi and MACD different?

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Thanks in advance.

Category: Tags: asked June 22, 2012

5 Answers

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MACD is a indicator, derived FROM price action.Heiken Ashi IS a method of displaying price action.

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MACD is Moving Average Convergence Divergence- used to identify moving averages that are indicating a new trend.Heikin Ashi are candlestick charts which are different from regular candlestick. Normal candlestick charts are composed of a series of open-high-low-close (OHLC) bars set apart by a time series. The Heikin-Ashi technique uses a modified formula.1- Close price: the close price in a Heikin-Ashi candle is the average of open, close, high and low price.2- Open price: the open price in a Heikin-Ashi candle is the average of the open and close of the previous candle.3- High price: the high price in a Heikin-Ashi candle is chosen from one of the high, open and close price of which has the highest value.4- Low price: the low price in a Heikin-Ashi candle is chosen from one of the high, open and close price of which has the lowest value.While MACD & Heiken Ashi are both designed to indicate the trend of the price action, and give signals when the trend is changing, they are calculated very differently.

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The Heikin-Ashi technique is used by technical traders to identify a given trend more easily. Hollow candles with no lower shadows are used to signal a strong uptrend, while filled candles with no higher shadow are used to identify a strong downtrend. While a MACD is a trend-following momentum indicator that shows the relationship between two moving averages of prices. The MACD is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. A nine-day EMA of the MACD, called the "signal line", is then plotted on top of the MACD, functioning as a trigger for buy and sell signals.(setting 26,12,9). Generally one uses the candle to show while the other uses a signal to show a trend.

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Heiken Ashi is a type of chart, while the MACD is an indicator. The Heiken Ashi chart is kinda like a candlestick chart, except that the calculation for each bar is different. Specifically, the Heiken Ashi chart has the following characteristics:1. Close price: calculated using the average of the open, close, high, and low price. 2. Open price: calculated using the average of the open and close of the previous bar 3. High Price: the highest value of among these: high, open, or close price 4. Low Price: the lowest value among these: high, open, or close priceAs for the MACD, just check out the source I linked below

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Heiken Ashi and MACD are derived and calculated from a very difference formula.

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