Ichimoku Cloud Indicator
Last updated
Last updated
When it comes to binary trading, technical analysis is a crucial aspect of the process. One indicator that has become increasingly popular among traders is the Ichimoku Cloud. It is a versatile tool that can provide valuable information about trends, support and resistance levels, and potential trading opportunities. In this article, we will discuss the basics of the Ichimoku Cloud indicator and how it can be used in binary trading.
The Ichimoku Cloud, also known as the Ichimoku Kinko Hyo, is a technical analysis tool developed by Japanese journalist Goichi Hosoda in the late 1930s. It consists of a set of moving averages and an area shaded in the chart. The Ichimoku Cloud calculation is based on the high, low and closing prices of an asset over a given time period.
The Ichimoku Cloud indicator is used to identify potential trading opportunities by analyzing several different elements. The first element is the Cloud itself, which is made up of two lines: the Senkou Span A and the Senkou Span B. When the Senkou Span A is above the Senkou Span B, it indicates that the asset is in an uptrend. Conversely, when the Senkou Span B is above the Senkou Span A, it indicates that the asset is in a downtrend.
Another element of the Ichimoku Cloud is the Tenkan-sen and Kijun-sen lines. The Tenkan-sen line, also known as the Conversion Line, is a moving average of the asset's high and low prices over a given period of time. The Kijun-sen line, also known as the Base Line, is a moving average of the asset's high and low prices over a longer period of time. When the Tenkan-sen line crosses above the Kijun-sen line, it indicates a potential buying opportunity. Conversely, when the Tenkan-sen line crosses below the Kijun-sen line, it indicates a potential selling opportunity.
The final element of the Ichimoku Cloud is the Chikou Span, which is the asset's closing price plotted 26 periods behind the current price. When the Chikou Span is above the current price, it indicates a bullish signal. Conversely, when the Chikou Span is below the current price, it indicates a bearish signal.
Access Finteria Trader from your Account Menu or go to Finteria Trader straight
Switch to Candlestick chart
Click on f(x) button on top of your Candlestick chart and search for Ichimoku Cloud, then choose Ichimoku Cloud from the search list, Ichimoku Cloud will be applied to your chart immediately
The Ichimoku Cloud is a powerful technical analysis tool that can be used in binary trading to identify potential trading opportunities. By analyzing the Cloud, Tenkan-sen and Kijun-sen lines, and Chikou Span, traders can gain valuable insights into an asset's trend, support and resistance levels, and potential buying or selling opportunities. However, like any technical indicator, it should not be used in isolation and should be used in conjunction with other technical and fundamental analysis tools.
