The most important component of Ichimoku is the cloud. The Ichimoku Cloud is the area formed between the lines in the graph, and it acts as a filter in the prediction. A large cloud foreshadows the trader the volatility of the price of a currency pair on Forex. The price breakthrough through the cloud and its subsequent tendency to the top, speaks about the high probability of choosing a successful trade for yourself, but if it declines, the result will be the opposite. The Ichimoku Cloud is a Forex strategy.
A cloud is formed from candles and lines. How to use the indicator and cloud Ichimoku?
Value of Candles
First, let’s look at the very meaning of candles:
1. If the candle is painted black, then the price moves down, if it is white, then it has positive trends.
2. If the body of the candle is long and the shadow is small, then there is a high probability that the candle will continue the given trend, and accordingly vice versa, if the candle is short and the shadow is still large, then it is likely that the direction chosen by it will soon change to the opposite.
3. If the candle did not go in the predicted direction, then it is likely that it will go opposite. Single candles can independently enter configurations.
Ishimoku indicator line classification (Ichimoku cloud formation):
1. Reconcile trend direction with Chikou line. You need to make sure that the trends in the Forex market coincide with the areas of intersection of the Kijun Tenkan lines – this parameter will increase the probability of a successful transaction, since Chikou works similar to the Momentum indicator.
2. The price depicted on the chart in any case should go beyond the Ishimoku cloud – in order for the Forex trend to be expressed, the price needs to go beyond it. This will increase the likelihood of a profitable transaction.
3. When concluding a transaction, do not neglect the rules of funds management, and remember that your transaction can be costly at the worst at half its cost!
In conclusion, we can say that the above strategy increases the likelihood that you can easily make money on Forex.