65-Day Academy · Day 8 · Reading Charts
Patterns on Raw vs Smoothed Charts
Patterns are defined on RAW candles
Engulfing, stars, hammers — all classic patterns are defined on real traded prices. On Heikin-Ashi (averaged) charts the same visual may appear or disappear purely from smoothing, so pattern statistics do not transfer. Never spot a "hammer" on an HA chart and trade it as one.
The division of labor
HA answers "is the trend healthy?" (clean same-color runs, wick behavior). Raw candles answer "where exactly do I enter, where is my stop, what pattern just printed?" A pro workflow: HA for the bias, raw for the trigger. Beginners who do everything on one chart type miss half the picture.
What you'll practise
You want to trade a reversal setup. Which jobs belong to the RAW candle chart? (Select all that apply)
15 XP in the app · intermediate
Sources
- Heikin-Ashi vs CandlestickInvestopedia
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All lessons are for educational purposes only and are not individualized financial advice, a recommendation, or a solicitation to buy or sell any security. Options involve substantial risk and are not suitable for every investor.