As a trader, you never make your decisions at random. On the contrary, you use different indicators to increase your chances of success. Among the technical analysis methods that are currently popular is the Ichimoku Kinko Hyo tool
This is a technique for effectively observing and analyzing Japanese candlesticks. This method aims to provide you with the information you need at a glance.
Ichimoku Kinko Hyo: the basics
Ichimoku Kinko Hyo is an indicator that is due to Goichi Osoda (1898 – 1982) better known as “Ichimoku Sanjin”. It is a technical analysis tool based on 5 curves composed of 3 different periods: short, medium and long term. Even if each curve works a little like a moving average, the Ichimoku is distinguished by its reactivity and the complete information it provides.
With this indicator, it is possible to obtain buy or sell signals while setting up a pre-established level of risk. Each trader has the possibility to establish specific rules taking into account your profile, objectives and constraints.
A technique to make it easier to interpret Japanese candlesticks
Ichimoku Kinko Hyo is based on a simple principle: this technique would make it possible to detect the balance of a curve by only taking a look at it. For this to be possible, it is necessary to know how to use this indicator and to recognize, in particular, “waves” and “signals”.
In any case, it is a method that provides a clear illustration of the current trend. It can be used to define the best moments for an input and output, but also to detect resistance and support without forgetting momentum. In addition, Ichimoku allows you to be warned in case of reversal of trends.
In any case, the Ichimoku tool is suitable for both a rising and a falling market. It is also suitable for any time interval and for any liquid trading instrument. The only situation where this method is not recommended is when there is no clear trend.
Discover our file to better understand this method and to learn how to visualize the balance of a curve at a glance!