Heikin-Ashi vs Tick Charts
Heikin-ashi averages each bar's values with the previous bar's, so the body shows calculated figures rather than traded prices. A tick chart keeps real prices and changes only when a bar closes, ending it after a fixed number of trades instead of a fixed span of time.
Both of these get suggested to somebody complaining that their chart is too noisy, which is why they end up compared. They are not competing answers. One changes what a bar contains and the other changes when a bar stops, and you can have either, both, or neither.
What each one is
Heikin-ashi averages each bar’s values with the previous bar’s. Its close is the average of the bar’s own four prices; its open is the midpoint of the previous heikin-ashi bar, so it is not a traded price at all. Heikin-Ashi covers all four formulas.
A tick chart closes a bar after a fixed number of trades rather than after a fixed period. The prices inside it are entirely real. Tick charts covers the mechanism, and candlesticks covers the bar both are variations on.
So they operate on different axes. Whereas heikin-ashi rewrites the contents of the bar, a tick chart leaves the contents alone and rewrites the rule that ends it.
Where they differ
Whether the prices are real. Every number on a tick chart traded. On heikin-ashi the open never did and the close is an average, so a level read off one is a level that did not exist.
Where the noise goes. Heikin-ashi hides alternation by carrying the previous bar forward. A tick chart does not hide anything — it redistributes the detail, giving a quiet hour one bar and a busy one sixty, so the noise that remains is at least proportional to the activity that caused it.
What each requires. Heikin-ashi needs nothing but the four prices and works everywhere. A tick chart needs a genuine trade count, so it works on futures and listed stocks and does not work on spot foreign exchange, where the count belongs to one broker.
How each affects your indicators. Heikin-ashi feeds smoothed values into every calculation, so an average of heikin-ashi closes is an average of averages. A tick chart feeds real values in but changes what a lookback period means, since fourteen bars is a different length of time on every part of the day.
Where they agree
Both are attempts at the same complaint — that a standard time chart is hard to read — arriving at it from opposite directions.
Neither tells you whether there is a trend. A market that keeps reversing after a few bars does so on a time chart, a tick chart or a smoothed one, and changing the drawing does not change that.
Both cost the same to trade — every order fills at a real price and pays the same round trip, however the bars were built.
And both look excellent on a trending sample, which is the condition that flatters every chart-type argument ever made.
Which one to use: Heikin-Ashi or Tick Charts?
Run a tick chart when the clock is the problem. If your complaint is that half your bars are lunchtime nothing that look identical to real bars, that is a bar-boundary problem and this fixes it at source without touching a single price.
Run heikin-ashi when the problem is you, not the chart. If you keep exiting good trends on single red bars, hiding those bars is a legitimate behavioral fix — and it is a behavioral fix rather than an analytical one, which is worth being honest about.
Run both together when you can. Heikin-ashi bodies on a tick-paced chart is a real and coherent combination: activity sets the bars, smoothing sets the color, and you keep a plain candlestick chart open for prices.
And use plain candlesticks for every order either way. Neither of these should be the chart you read a stop level from — one because its prices are calculated, the other because its levels are yours alone.
Why they are not really rivals
Because a chart type is two independent decisions. What goes in the bar, and when the bar ends. Almost every discussion of chart types collapses those into one question, which is why heikin-ashi, renko and tick charts get listed as if you had to pick exactly one.
And because they fail differently. Heikin-ashi’s failure is that its prices are not real. A tick chart’s failure is that nobody else shares your bars, so your levels are private.
The original data
Heikin-ashi appears in 74 titles, at a median of 20,370 views across 59 channels.
One chart type with a large audience. Heikin-ashi’s appeal is visible in a thumbnail — a cleaner-looking chart is an easy thing to advertise — and it draws nearly three times the median audience of the candlestick basics it is built on, which sit at a 7,167 median across 645 videos.
Set side by side, the expanding tick bars are the information. More bars in the same span of time means activity picked up, which is an event. Calm smoothed bars mean the formula is doing its job.
When it fails
The characteristic failure is treating either as noise reduction and stopping there. Heikin-ashi does not remove noise, it conceals it — the alternating bars are still in the underlying data and will still take out a stop placed where the smoothed chart suggested. A tick chart does not remove noise either; it moves the detail to where the trading was, which is more honest and still leaves every reversal intact. A trader who adopts either expecting a quieter market gets a quieter picture of the same market, and the difference between those two things is where the account goes.
A second failure is placing orders off heikin-ashi values. The open never traded and the close is an average, so the risk you measured is not the risk you took.
A third is carrying indicator settings onto a tick chart unchanged, where a fourteen-period lookback covers a different span of time on every part of the day.
A fourth is expecting your tick levels to hold. Nobody else is watching your bar boundaries.
And a fifth is running both without keeping a plain chart open, which leaves you with no real prices anywhere on screen.
Related
Heikin-Ashi covers the averaging formulas. Tick charts covers activity-paced bars. And candlesticks covers the plain bar both modify.
People compare these because both get recommended as ways to make a messy chart readable. They do it by completely different means, and only one of them costs you the ability to place an order at a price you can see.
— Michael Whitman
This page is educational, not financial advice. Test every idea on your own charts before risking money.