The full title of the LED Binary Options - Ichimoku Kinko Hyo.It Was designed by Japanese Goichi Hosoda. The indicator may seem complicated at first glance. But I note that it gives traders a very clear and good signals. Therefore, it can be used independently in the tender, without tools Technical Analysis.
On the live chart Ichimoku indicator represented by five lines:
Two lines form Ichimoku Cloud. The graph is a colored area within the two lines. The upper boundary - the line red Senkou Spa A. The lower limit of - line green Spa Senkou B. The other three lines represent different periods. Their names Chinkou Span Kindzhun Sen Tenkan September.
Now we dwell on each of Lines and Signals:
- burgundy line Kindzhun September (Kijun sen) displays the long-term trend. The calculation period is taken 26 (monthly norm of working days in Japan). The direction of the line-up indicates an uptrend. Direction downlink indicates a downtrend.
- blue line Tenkan September (Tenkan sen) displays a short-term, rapid trend. It is calculated as the average of the maximum and minimum figures over a long period. If the curve moves up, it shows the short-term uptrend. If it moves down, it shows the short-term downtrend.
- If the blue line moves up and crosses the maroon line upwards, worth buying option CALL. If the blue line goes down and crosses the maroon line downwards, worth buying option PUT.
- light green Line Chico Span (Chinkou Span) - moves on 26 periods ago, belongs to the second period. Displays the closing price chart for candlesticks.
- If the price moves within the cloud, signals similar both on the indicator linear regression. Referring to the top line soprativleniya, asset turns and starts to go down. Then open the option PUT. Regarding the lower support line, asset turns and starts to go up. Then open the option CALL.
- If the price of the asset crosses the lower boundary of the cloud Senkou Span B, which moves down, you can buy an option PUT. Conversely, if the line goes up and crossed to the price of an asset is the option to open CALL.
By Ichimoku trading better in the long run.
Ichimoku Cloud is a strong trend indicator. Beginners often bypass it because of its visual complexity. In fact, if you understand the meaning of its signals, there is nothing difficult in working with the Ichimoku Cloud.
The indicator consists of five lines:
- Kijun-Sen,
- Tenkan-sen,
- Chinkou Span,
- 2's lines Senkou Span, forming a "cloud".
Basically, traders use only those signals that generate the first two lines of Kijun and Tenkan. They are simple moving averages with periods of 26 and 9, respectively. Tenkan, since it has the smallest period, is more sensitive to changes in market fluctuations. Kijun perfectly shows the situation on the market for a longer period of time.
Despite the fact that the Ichimoku Cloud indicator generates several types of signals, to determine the trend, it is enough just to look at the price location relative to the Cloud itself.
- If the Japanese candles are located inside it, then there is a flat on the market.
- If above - an uptrend.
- As soon as price breaks through the lower line of the Cloud, a descending trend is emerging on the market.
Advantages of Ichimoku:
- Having understood the signals, it will be quite easy to determine the current price position in the market.
- The indicator demonstrates high accuracy in trading signals.
Disadvantages of Ichimoku:
- The main disadvantage of this indicator is the difficulty of its development for beginners.
As for the settings, by default they are set to 9 and 26 for the Tenkan and Kijun lines, and for Chinkou and Senkou, 26 and 52 are set respectively.
