Start with the transformation
A Heikin-Ashi candle is tied to a time period, but its displayed OHLC values are calculated averages. Its close averages the current actual open, high, low and close. Its open averages the previous Heikin-Ashi open and close. The displayed high and low then compare the actual extremes with the calculated values.
A Renko chart adds a brick after price moves by a chosen brick size under the platform’s construction method. A point & figure chart adds X boxes for rising moves and O boxes for falling moves, using a chosen box size and reversal amount.
Renko and point & figure are price-based rather than one-mark-per-time-period charts. Unequal amounts of clock time can therefore sit behind equal-looking bricks or boxes.
Ask what produced each mark
Switch lenses. The explanation names the input, the rule and the information removed.
The cleaner shape comes from a calculation or threshold. It is not a clearer copy of every market price.
Heikin-Ashi: time remains, exact OHLC changes
For synthetic Thursday, actual O ₹104, H ₹111, L ₹96 and C ₹105 give a Heikin-Ashi close of ₹104: (104 + 111 + 96 + 105) ÷ 4. If the previous Heikin-Ashi open was ₹101 and close was ₹103, Thursday’s Heikin-Ashi open is ₹102.
The displayed candle is smoother because current and previous values enter the calculation. Its ₹102 open is not Thursday’s actual ₹104 opening trade. Use standard candles when exact gaps, entries, exits or executable prices matter.
Heikin-Ashi retains one transformed candle per underlying time period. It reduces visible short-term variation, but that same smoothing can delay or hide a change.
Renko and point & figure: price movement decides when to draw
With a fixed ₹2 Renko brick in a simplified close-based example, a move that stays inside the next ₹2 threshold draws no completed brick. The missing brick does not mean nothing happened; it means the chosen filter did not admit the movement.
Point & figure needs at least a box size, a reversal amount and a source rule. With ₹2 boxes and a three-box reversal, a move of less than ₹6 against the active column does not start the opposite column in this simplified setup.
Change the brick size, box size, reversal amount, source, calculation method or underlying interval and the chart can change. Record those settings whenever the picture supports an analysis.
Before you choose this chart
- Why use it?
- To suppress selected fluctuations and make sustained price direction or threshold moves easier to inspect.
- Who is it for?
- Experienced readers with a defined trend or price-movement question and a written construction rule.
- When should you use it?
- Use Heikin-Ashi to inspect a smoothed time-based path; use Renko or point & figure when fixed price movement matters more than equal time intervals.
- Why should you not use it?
- Do not use synthetic marks as actual trade prices, for precise gaps or fills, or for backtests that assume those displayed levels and times were executable.
- What will you miss?
- Heikin-Ashi replaces exact period OHLC with averages. Renko and point & figure suppress sub-threshold movement and regular time spacing; all three can hide detail that standard prices retain.
A Heikin-Ashi candle displays an open of ₹102 while the actual session opened at ₹104. Which price belongs in an exact gap calculation?
Which lens fits the question?
A specialised chart without its formula, source, underlying interval, brick or box size and reversal rule is incomplete evidence. Two people can select the same chart name and produce different pictures.
These lenses are useful only after the question is precise. The last lesson in this chapter turns that principle into a repeatable chart-selection process.