TEMPORALITIES ACCORDING TO THE INDICATOR ICHIMOKU-KINKO-HYO

Greetings and welcome dear readers of this prestigious platform and especially to all those who make daily life in the @Leofinance community. Through the next installment we will be finalizing the series of publications associated with the ICHIMOKU-KINKO-HYO indicator, remembering that we have studied each of the lines that compose it as well as the integration of these in order to establish profitable and effective scenarios when trading in the market.

Consequently, it is to be expected that the temporalities play a preponderant role at the time of developing our analysis and based on the above it is valid to ask ourselves which is the best time period for technical analysis associated with the Ichimoku indicator and which is the best indicator to use with it?

To answer these questions, we must remember each of the approaches studied so far, so it is necessary to take into account that this type of indicator can be applied in any timeframe and for any economic asset, hence it is determined by the type of speculative strategy that we use in our trading sections.

So each line is adapted to the type of timeframe in which we work, remembering that the fast line is usually used for short-term markets and the slow line for longer timeframes.

Having clear the temporalities factor, it is necessary to determine which companion can provide us with effective confirmations to validate our decisions in the market, in this sense, from my way of seeing trading and the different patterns that make up the price, I can determine that the RSI indicator or relative strength index, provides us with a large number of information that we can complement with the ICHIMOKU-KINKO-HYO indicator, as are the overbought and oversold zones, as well as the direction and strength of the market.

At this point, we can perform some practical demonstrations to guide the reader on the approaches outlined here so that through practice on demo accounts we can identify patterns that we can replicate in real trading.

As seen in the chart for the BTC/USDT pair in daily timeframe, the relative strength indicator RSI, has identified an overbought zone, so the next action to speculate, is a correction in the price of the asset (pattern 1), hence the most likely scenario would be to sell and profit, which is confirmed by the ICHIMOKU-KINKO-HYO indicator, specifically with the chikou span line, which behaves as a resistance that the price without strength will not be able to break, hence it makes a correction to obtain the necessary capitalization and strength to continue rising.

Another aspect of confirmation based on the above, is observed in the 26-period lagging line and as explained in the previous publications, the 26-period candle in the past is below the current candle of the price, which translates into a strong bearish signal, a signal that confirms the above mentioned.

In this sense, in ICHIMOKU-KINKO-HYO indicator in an excellent tool that we can use to speculate our buy and sell signals and profit from the market.

As we have been able to establish throughout this series of writings, associated with the ICHIMOKU-KINKO-HYO indicator, this is characterized by presenting a greater reliability when operating in the market in well-defined trends, so it is necessary to see the indicator as a whole and not to study its lines separately because we could fall into false signals that would make us lose our capital.

Due to its multiple components, it does not allow us to generate a wealth of information that we will be able to use to obtain effective inputs that can be replicated in any financial asset.

At this point, it is an indicator that adapts to any commercial need and its durability over time allows us to take it into account as an alternative that produces profitability in the market.

[1] Ichimoku Kinko Hyo. Article: Online Access