Continued.  Summary of Forex Indicators.

Let’s continue and finish our summary of forex indicators.

Ichimoku Kinko Hyo

IKH or Ichimoku Kinko Hyo is an indicator that gauges future price momentum and determines future areas of support and resistance.

Ichimoku translates to “a glance”, kinko means “equilibrium”, while hyo is Japanese for “chart”.

Putting that all together, the phrase ichimoku kinko hyo stands for “a glance at a chart in equilibrium.”

• If the price is above the Senkou span, the top line serves as the first support level while the bottom line serves as the second support level. If the price is below the Senkou span, the bottom line forms the first resistance level while the top line is the second resistance level.
• The Kijun Sen acts as an indicator of future price movement. If the price is higher than the blue line, it could continue to climb higher. If the price is below the blue line, it could keep dropping.
• The Tenkan Sen is an indicator of the market trend. If the red line is moving up or down, it indicates that the market is trending. If it moves horizontally, it signals that the market is ranging.
• The Chikou Span is the lagging line. If the Chikou line crosses the price in the bottom-up direction, that’s a buy signal. If the green line crosses the price from the top down, that’s a sell signal.

Each chart indicator has its imperfections. This is why forex traders combine many different indicators to “screen” each other.

As you progress through your forex trading career, you will learn which indicators you like the best and can combine them in a way that fits your forex trading style.

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