Study of Heiken Ashi Candlestick for Noise Reduction

In this study, we examined Heiken Ashi's ability to reduce the noise when the traditional candlestick bars are transformed into Heiken Ashi candlesticks. The transformed candlestick is done by a python program. The entropy is calculated at a given confidence level for both traditional candles and Heiken Ashi. By assumption, the noise is measured by the entropy. The higher the value of the entropy, the more pronounced the noise is. The hypothesis test for Heiken Ashi showed accepted results, and the Heiken Ashi candle entropy is lower than traditional candles.