2023-04-03 • Updated
When you give a first glance at the Ichimoku indicator, it may hurt your eye. Just take a look at the picture below.
Let these sharp lines and stripes not scare you! In this article, we will teach you how to use this complicated tool for your successful trading decisions.
Ichimoku Kinko Hyo (Ichimoku) is a complex and very informative technical indicator. In Japanese, it means a “glance at a chart in equilibrium”. In this article, we will provide a brief explanation of indicator’s purposes and elements needed for our strategy. If you want to go into the depth of trading with Ichimoku, we recommend you to visit the FBS Guidebook.
There are five main parts of the Ichimoku indicator.
What Ichimoku is useful for?
Ichimoku is great when you need to identify the direction and the strength of a trend. It also helps to set support and resistance levels. Most importantly for us, Ichimoku can be used for building an effective trading system.
For the strategy we are going to explain below, we need the Stochastic Oscillator with customized settings that will be used as a filter.
Timeframe: daily
Currency pairs: majors
Indicators: Ichimoku (default);
Stochastic oscillator with the following settings:
%K period = 5; %D period = 3; Slowing = 3.
Example: On the daily chart of EUR/USD, the price was trading above the Kijun-sen and the cloud. On November 30, the stochastic oscillator crossed in the overbought zone. We opened the long trade at the opening price of the next candlestick at 1.1927. The Stop Loss was placed at 1.1897, 30 pips below the opening price. The Take Profit was located at 1.1987 (60 pips above the initial order).
Example: On the same daily chart of EUR/USD, the price was moving below the blue line of Ichimoku and the cloud. On July 25, the stochastic oscillator crossed in the oversold zone. We placed a sell order at the opening price of the next candlestick. This is the 1.1145 level. We locate the Stop Loss at 1.1175 (30 pips above the entry), while Take Profit goes at 1.1085 (60 pips below the entry).
As we can see, with the strategy above the Ichimoku indicator looks less horrifying for a novice trader. The lines can show you the right direction of a trend and, in fact, “predict” further momentum.
Sometimes a chart or a candlestick pattern may provide a decent entry signal if it is located at a certain level. A pin bar is one of the most reliable and famous candlestick patterns, and when traders see it on the chart, they expect the price to change its direction soon.
Among hundreds of different indicators and technical tools for traders, the relative strength index (RSI) is one of the most popular due to its simplicity and, at the same time, its power in various trading cases. In this article, we want to tell you about another powerful tool similar to RSI but with some cool tweaks.
There are a lot of valuable strategies that require the knowledge of candlestick patterns and oscillators. However, not of them are profitable. When you start trading with them, you can face situations when the strategy is not moving your way.
If you are 18+ years old, you can join FBS and begin your FX journey. To trade, you need a brokerage account and sufficient knowledge on how assets behave in the financial markets. Start with studying the basics with our free educational materials and creating an FBS account. You may want to test the environment with virtual money with a Demo account. Once you are ready, enter the real market and trade to succeed.
Click the 'Open account' button on our website and proceed to the Trader Area. Before you can start trading, pass a profile verification. Confirm your email and phone number, get your ID verified. This procedure guarantees the safety of your funds and identity. Once you are done with all the checks, go to the preferred trading platform, and start trading.
The procedure is very straightforward. Go to the Withdrawal page on the website or the Finances section of the FBS Trader Area and access Withdrawal. You can get the earned money via the same payment system that you used for depositing. In case you funded the account via various methods, withdraw your profit via the same methods in the ratio according to the deposited sums.
FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.
Your request is accepted.
A manager will call you shortly.
Next callback request for this phone number
will be available in
If you have an urgent issue please contact us via
Live chat
Internal error. Please try again later
Don’t waste your time – keep track of how NFP affects the US dollar and profit!
|
