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ichimoku trading

The Complete Guide to Ichimoku Trading for Binary Options

20 February 2017 • Binary options

Ichimoku trading will change your mind about binary trading. Do not fear. It will change your mind in a good way.

The full name of this particular trading tool is Ichimoku Kinko Hyo, which is Japanese for “One glance equilibrium chart” or “Chart balance at a glance.”

This tool was developed by a man named Goichi Hosoda a Japanes journalist in the late 1960’s.

It gives the trader more data points than your typical candlestick chart. And any trader should desire more data points. You want more accurate trading information don’t you?

It makes use of four individual measure of price action. These can be used in individual indicators.

Or you can use them in combinations of 2,3, or 4. This will create a powerful and complete binary trading system.

What Makes Up Ichimoku Trading?

Essentially, the goal of Ichimoku trading or Ichimoku Cloud is to offer a quick look at the state of the market based on moving averages.

You can break this chart up into several components on the indicator.

Tenkan-Sen:

The red line on the indicator will be a 9-period setting by default. It will be the line closest to the price.

Kijun-Sen:

The blue line on the indicator has a default setting of 29 periods.

Chikou Span:

The Green line is the closing price for the most recent candle. This can be projected back 26 candles on the indicator.

It’s always behind the price by 26 candles. It’s resistance and support.

Kumo:

This is where the chart gets its name. Ichimoku Kumo is the always projected at 26 candles in front of the current price. It’s both resistance/support and a prediction of the future for the support/resistance.

How Do we Make Use Of These In Binary Trading?

This indicator allows you to see either the uptrend or downtrend or if the market is moving sideways (ranging).

The cloud is your middle line. If the price is below the cloud, the market is in a downtrend.

If the price is about the could, it’s in an uptrend. If the price is inside the cloud, then the market is moving sideways.

When the market is in a downward trend, look for the Put signal. Put signals are what happens when the red goes below the blue line.

Essentially, the cloud helps you to place stops and recognize when to be bullish or bearish. And this is excellent, since protecting your capital is the main battle you as a trader must face.

You can focus on candlesticks or price action analysis around the cloud. This will help you see if a decisive reversal or continuation pattern will take shape.

Simply put, above the cloud means look for buying entries. Below the cloud, look for temporary corrections so that you enter a sell order in the trending direction.

Conclusion:

Ichimoku trading should be used with other indicators to enhance your binary trading. You will sometimes find it’s too late for binary options on the Ichimoku trading indicator and have to search for other indicators.

Have you used Ichimoku Cloud in your trading? Has that helped you?

Let us know on social media! And, as always, don’t stop trading!

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