Heikin-Ashi is a candlestick variant that averages each bar with the one before it, so a trend appears as a long run of same-coloured candles instead of an alternating mess. Its close is the average of that bar’s open, high, low and close, and its open is the average of the previous Heikin-Ashi open and close. The price of that clarity is that the levels shown never actually traded.

can I put a stop loss on a heikin ashi level

No — a Heikin-Ashi high or low is a computed average, not a price anyone transacted at, so a stop placed there points at a level that does not exist in the real order book where your order will execute. The same objection applies to reading support and resistance off one. Use Heikin-Ashi to judge whether a trend is intact, then read standard candles for anything price-specific.

how to choose renko brick size

Set it from the stock’s own volatility — ATR is the usual reference — and then leave it fixed. Brick size is the parameter that changes everything on a Renko chart: a ₹5 brick and a ₹20 brick on the same stock produce different patterns and can produce opposite signals. Adjusting it until the chart agrees with a view you already held is curve-fitting with extra steps.

a chart that draws a new brick only after price moves a fixed amount is called a

A Renko chart. It discards the time axis entirely — a brick appears once price has travelled the chosen amount, whether that took ten minutes or ten days — which compresses out sideways noise and makes trends and levels unusually easy to read. What you give up is any sense of how long a move took.

why do smoothed charts make backtests look better

Because the smoothing removes exactly the whipsaws that would have stopped you out in live trading. A trend-following system tested on Heikin-Ashi or Renko data is being tested on a price series with its noise deleted, so the equity curve flatters the rules in a way real fills never will. Check any such result against standard candles at prices that genuinely traded.

Heikin-Ashi, Renko and point & figure

Standard candlesticks show exactly what happened. Every alternative chart type buys visual clarity by throwing something away — and each one invites a specific error, because traders forget what was discarded.

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Heikin-Ashi

HA close = (O + H + L + C) ÷ 4 HA open = (previous HA open + previous HA close) ÷ 2

The effect: Each bar is averaged with the one before, so trends show as long runs of one colour
The cost: The prices displayed never actually traded

What it is genuinely good for: holding a trend. The smoothing removes the single red day inside a strong advance that makes people exit early. Use it to decide whether you are in a trend, then switch to standard candles to decide where to act.

Renko

Renko discards time entirely. A new brick is drawn only when price moves a fixed amount — say ₹10 — regardless of whether that took ten minutes or ten days. The result is a chart of pure price movement with all the sideways noise compressed out.

	What it gives	What it costs
Heikin-Ashi	Smooth trends, easier to hold	Synthetic prices; useless for stops and levels
Renko	Noise removed, clean trend and level reading	No time axis; brick size is an arbitrary choice that changes everything
Point & figure	Very long-term structure, clear breakouts	Same box-size arbitrariness; almost no one uses it now

How to use any of them safely

1
Use them for the decision they suit
Trend direction and whether to stay in a position. Never for entry price, stop placement or level identification.
2
Always keep a standard chart open
The moment you need a real price — a stop, a level, an entry — read it from candles that reflect actual trades.
3
Fix the parameters from volatility, not from preference
Brick size from ATR, and then do not touch it. A parameter you keep adjusting is a parameter fitting your bias.
4
Be suspicious of how good the backtest looks
Smoothed charts flatter trend-following systems dramatically in testing, because the smoothing removed exactly the whipsaws that would have stopped you out in reality.

Simple bhasha mein

Dhoop ka chashma

Chashma pehen ke chubhan kam ho jaati hai, par kuch cheezein dikhna bhi band ho jaati hain. Heikin-Ashi aur Renko wahi chashma hain — chart smooth aur saaf lagta hai, par woh smoothness thodi der baad ki hai. Signal saaf dikhega, par asli bhaav se thoda peeche.

What to remember

Every alternative chart buys clarity by discarding information.
Heikin-Ashi prices are synthetic — never use them for stops or levels.
Renko removes time; its brick size is an arbitrary choice that changes every signal.
Use smoothed charts for trend direction, standard candles for anything price-specific.
Smoothed charts flatter backtests because they remove the whipsaws that hurt in reality.

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Common questions

Short, direct answers to what people ask about this topic.

heikin ashi meaning: Heikin-Ashi is a candlestick variant that averages each bar with the one before it, so a trend appears as a long run of same-coloured candles instead of an alternating mess. Its close is the average of that bar’s open, high, low and close, and its open is the average of the previous Heikin-Ashi open and close. The price of that clarity is that the levels shown never actually traded.
can I put a stop loss on a heikin ashi level: No — a Heikin-Ashi high or low is a computed average, not a price anyone transacted at, so a stop placed there points at a level that does not exist in the real order book where your order will execute. The same objection applies to reading support and resistance off one. Use Heikin-Ashi to judge whether a trend is intact, then read standard candles for anything price-specific.
how to choose renko brick size: Set it from the stock’s own volatility — ATR is the usual reference — and then leave it fixed. Brick size is the parameter that changes everything on a Renko chart: a ₹5 brick and a ₹20 brick on the same stock produce different patterns and can produce opposite signals. Adjusting it until the chart agrees with a view you already held is curve-fitting with extra steps.
a chart that draws a new brick only after price moves a fixed amount is called a: A Renko chart. It discards the time axis entirely — a brick appears once price has travelled the chosen amount, whether that took ten minutes or ten days — which compresses out sideways noise and makes trends and levels unusually easy to read. What you give up is any sense of how long a move took.
why do smoothed charts make backtests look better: Because the smoothing removes exactly the whipsaws that would have stopped you out in live trading. A trend-following system tested on Heikin-Ashi or Renko data is being tested on a price series with its noise deleted, so the equity curve flatters the rules in a way real fills never will. Check any such result against standard candles at prices that genuinely traded.