EDUCATION: Ichimoku - Part 1
Hello, dear subscribers!
Today we starting the training series of the Ichimoku Indicator trading. This article is about the Ichimoku definition and the easiest trading strategy using it.
What is the Ichimoku Indicator?
This indicator consists of 4 components:
1)Conversion Line - the 9 period high - low average price, demonstrates the short term period trend. When the price above it - the market is in local uptrend.
2)Base Line - the 26 period high - low avearge. It means the same as the conversion line but in the medium term period.
3)Lagging Span - close price plotted 26 period in the past. It can be used for the trend confirmation. When the lagging span is above the price it means the strong uptrend.
4)Cumo Cloud Lines - this lines will be examined in the next education article.
Ichimoku Strategy (Conversion + Base + Lagging Span)
The first Ichimoku strategy is very easy to apply for your trading. First of all you should filter signals with the lagging span: when it is above the price - it is time for long, in opposite - for short.
When it is done you should find the point, where the conversion line crossed over the baseline from down to up and execute long position.
You can exit long the conversion line bacame lower that the base line. The additional confirmation for exiting the position is the lagging span and price crossover.
Next time we will examine the most interesting part - the Ichimoku Cloud and appropriate strategies.
Today we starting the training series of the Ichimoku Indicator trading. This article is about the Ichimoku definition and the easiest trading strategy using it.
What is the Ichimoku Indicator?
This indicator consists of 4 components:
1)Conversion Line - the 9 period high - low average price, demonstrates the short term period trend. When the price above it - the market is in local uptrend.
2)Base Line - the 26 period high - low avearge. It means the same as the conversion line but in the medium term period.
3)Lagging Span - close price plotted 26 period in the past. It can be used for the trend confirmation. When the lagging span is above the price it means the strong uptrend.
4)Cumo Cloud Lines - this lines will be examined in the next education article.
Ichimoku Strategy (Conversion + Base + Lagging Span)
The first Ichimoku strategy is very easy to apply for your trading. First of all you should filter signals with the lagging span: when it is above the price - it is time for long, in opposite - for short.
When it is done you should find the point, where the conversion line crossed over the baseline from down to up and execute long position.
You can exit long the conversion line bacame lower that the base line. The additional confirmation for exiting the position is the lagging span and price crossover.
Next time we will examine the most interesting part - the Ichimoku Cloud and appropriate strategies.
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