Stock Market Education & Resources

how to scan for heikin ashi stocks

July 22, 2025 Comments Off on how to scan for heikin ashi stocks

Heikin Ashi is a unique candlestick charting technique that helps traders filter out market noise and identify trends more effectively. Unlike traditional candlesticks, Heikin Ashi averages price data to provide a smoother representation of market movements. Scanning for Heikin Ashi stocks involves identifying strong trends, reversals, and momentum shifts. This article explores the best ways to scan for stocks using the Heikin Ashi technique.

1. Understanding Heikin Ashi Candlesticks

Before scanning for stocks, it’s essential to understand how Heikin Ashi candlesticks work:

  • Green Candles with No Lower Wicks: Strong uptrend signals.
  • Red Candles with No Upper Wicks: Strong downtrend signals.
  • Doji or Small Candles: Potential trend reversal or consolidation.

2. Using Stock Scanners for Heikin Ashi

Several trading platforms allow traders to filter stocks based on Heikin Ashi patterns. Popular stock screeners include:

  • TradingView: Offers Heikin Ashi-based screening and alerts.
  • ThinkorSwim: Customizable Heikin Ashi scanning scripts.
  • Finviz: Identifies trending stocks based on technical indicators.

3. Key Indicators to Use with Heikin Ashi

To refine your scans, combine Heikin Ashi with these technical indicators:

  • Moving Averages (50-day & 200-day): Identify long-term trends.
  • Relative Strength Index (RSI): Detect overbought or oversold conditions.
  • MACD (Moving Average Convergence Divergence): Confirm trend direction.
  • Volume Analysis: Higher volume during a trend confirms strength.

Follow these steps to scan for stocks using Heikin Ashi:

  1. Choose a Time Frame: Heikin Ashi is effective on daily and weekly charts.
  2. Filter for Strong Trends:
    • Look for consecutive green candles with no lower wicks for uptrends.
    • Identify consecutive red candles with no upper wicks for downtrends.
  3. Confirm with Indicators: Use RSI and MACD to validate trend strength.
  4. Check Volume: Ensure increasing volume supports the trend.

5. Finding Heikin Ashi Reversals

  • Doji or Small Candles: Sign of potential reversals.
  • Color Change After a Trend: A green candle after a red streak may indicate a bullish reversal.
  • Divergence with RSI or MACD: Confirms trend exhaustion.

Conclusion

Scanning for Heikin Ashi stocks helps traders identify clear trends and potential reversals with less noise. By combining Heikin Ashi with technical indicators and volume analysis, traders can refine their strategy and increase the accuracy of their trades.