Forex trading and all complete information about Ichimoku indicator
With the continuous improvement of the Internet and the means of communication for traders who trade Forex over the Internet, it has become possible to have better access to information. Because of this, many traders and investors believe that after the release of new news, reading analytical publications and other similar information significantly increases their chances of winning. But that’s not the case: relying on the news can result in huge financial losses. Why is this happening? Without a detailed consideration of this matter, the real reason for understanding this reason will hardly be understood. So let’s do a more detailed analysis:
The concept of proper circulation:
Most beginners imagine that applying news to trading will definitely come in handy. But this is wrong. The first thing that needs to be said about the news is that it fully reflects the changes in the market. But usually all these confirmations are not stable and the currency reacts to this news differently than expected. Of course, the leading centers of supply and demand do not pass through the market, but at the same time there is no logic in their movements. The main reason for underestimating the importance of news is the market. Because of this, news trading has become almost unreal. So when investors know in advance when certain news items will be released and what impact they will have on the market, they start taking action. Therefore, when the news is released to the public, it is difficult to notice the reaction of the market or there will be no reaction at all as everything has been factored into the price. Care should also be taken to pay attention to people’s personalities, and the real picture showing the “meaning” of the news will become clearer.
Reasons affecting the movement of the trading market
Another reason that affects trading during the news is people’s emotions that violate a big difference in trading discipline. Even analysts can sometimes be wrong. In some situations where it would be better to close the open position, the trader will not do so as it means that an active move has started. At the same time, the messages should not be ignored. It is well known that highs in the market often occur after news with positive expectations, and lows, on the contrary, after unpromising news. From this it can be concluded that for traders with large capital who trade large pairs, the right decision would be to forego news trading and instead use an orderly trading method. News is also part of technical analysis, which is an indispensable part of any well-designed trading system.
All the important information about the Ichimoku indicator:
What is the Ichimoku indicator?
It is an indicator that combines different methods of price forecasting, as well as a set of indicators. The indicator was used to show trend direction, identify support and resistance levels and generate buy and sell signals. The Ichimoku indicator was developed by technical analyst Goichi Hosoda (Ichimoku Sanjin) in the 1930s with the aim of predicting the behavior of the Nikkei on the daily and weekly charts.
Tenkan-sen (displacement line): in red – shows the average price over the first period and is defined as the sum of the highs and lows over the period divided by two. This line shows the direction of the trend in the short term.
Kijun-sen (Standard Line, Baseline): Blue – shows the average price over the second period. This line is used to show the direction of the market. When the price is above the Kijun-Sen, it means an uptrend. On the other hand, if the price is below Kijun-sen, it means a downtrend.
Senkou A (First Main Line): Indicates the midpoint between two preceding lines that are shifted forward, and the value of the shift is the second time period.
Senkou B (second main line): Displays the average price over the third period with a forward shift equal to that of the second period.
Kumo (the cloud): It is the area between Senkou Span A, B. Price movement through this cloud means that there is no clear trend in the market and in this case the top and bottom lines of the cloud represent support and resistance levels.
When the price is above the cloud, the top line of the cloud represents the first bottom
The developer of this indicator recommends the following settings: Tenant-sen: 9; Ki jun-sen: 26; Sensuous A: 52; Senkou B: 26. These are the ideal setups for trading the 1-week time frame of the Japanese stock market. Also, these settings work well for time frames and other markets.