To study the Ichimoku indicator mechanism in detail, its structure and most importantly, how to successfully use it to build an efficient trade in the Forex, you should to familiarize some reference data.
The advantages and using of the Ichimoku indicator
The Ichimoku indicator is a product of more than thirty years of research analyst of a major Japanese trader Goichi Hosoda. He learned a lot of information in finding a perfect strategy for forecasting of the currency fluctuations. Eventually he settled on the strategy published in the 60s by the author under the pseudonym Ichimoku Sangin. This strategy immediately gained huge popularity among the business analysts and today the number of its fans continues to grow.
It is no wonder, because it has at least two major advantages: this system is based on such standard analysis economic tool as the moving averages and besides it is very easy to understanding. Also, basing its strategy on the Ichimoku indicator using, the market participant has a very clear picture of the Forex market developments and he could to forecast when to enter, when to exit, how to start and stop the operation with the greatest benefit.
Technical analysis with the Ichimoku Kinko Hyo indicator
For correct Ichimoku indicator using, it is important to take into account the features of your trading system. The Ichimoku strategy is not entirely universal, it was developed under the Japanese Nikkei stock index and, according the author, for the weekly scale of the wave oscillations W1. This is a reasonable option, given that the level of the random noise is reduced, calculation is simplified, and errors are reduced.
The interface of the Ichimoku system is very simple, ergonomic and allows at a glance to determine the trend without the auxiliary tools and Forex indicators using. Herewith, it preserves a maximum efficiency of the price chart, which is often very overloaded with excessive information. Besides, it automatically calculates the support and resistance levels, greatly simplifying the analysis and generates not only buy but also sell signals. This is possible because the Ichimoku indicator is based on the price channels lines, regardless of the certainty of the overall market condition. It not lost its opportunities even when the market is in a flat.
The Ichimoku indicator may seem difficult for a beginner. All price chart is densely braided by lines, whose crossing is forming the “Ichimoku cloud”, they are also shaded areas of the subsequent oscillations. But, actually, this tool includes only five lines, four of which are only the Japanese variation of the moving average and the line, which coming after the price line, oscillates. Thus, on closer examination, the Ichimoku system is absolutely not difficult.