Does it sound like a love story? Let see where this story goes. Last week I heard for the first time about Ichimoku. People love him and it seems like he returns love to them, because he is giving them a lot of pips!
Probably you would be asking what has Ichimoku to do with Forex trading. In Forex trading there are a lot of indicators. These indicators are tools that help you to get an indication of what price will do, so you would know when to enter the market with better chances to make a profit. So now you know.
My IML leader told me about it and said that the trade ideas you get from Ichimoku have high probability. Another member was using it with great success. I just followed along and won some pips. Nice.
Today I was listening to an educational call our leader had, where he tried to explain what to look for and how it works. Well, it was Japanese for me. The charts were so full of lines that I could not see what he was trying to explain. So it was time to educate me.
Who is he?
He was invented by a Japanese called Goichi Hosoda a long time ago. Goichi used to analyze the Nikkei index. He combined some indicators to do so. After 30 years of trading research, he published a book with Ichimoku Kinko Hyo, which means “one look (or glance) equilibrium chart”. There are several names used like just Ichimoku, Ichimoku strategy or Ichimoku Cloud and a lot more. In this post, I will just keep calling him Ichimoku.
Love at first sight?
Definitely not. In Tradingview you can click on the button that says Indicators. In the search field type in “Ichi” and you will find a list of different Ichimoku uses. I choose the Ichimoku Cloud. My chart looked like this, a total chaos.
A lot of numbers and lines appeared in my chart. What am I looking at? What are all of those things? What should I look at?
The better question would be, could I be able to comprehend and use all of this? I felt like a complete beginner.
Well, it was time to call an old friend, Google. Please help to guide me through all of this. What I understood was, that there are 5 lines involved. Two of them will provide the clouds. All of them has a name and a specific function. When lines cross each other something is about to happen.
Let me figure out what those lines mean and I will come back to you.
Do you have experience with Ichimoku? Do you use it with success? Is he the love of your life? Please leave a comment if you have experience with him or if you want to know more.