Let’s examine a technique known as Ichimoku Kinko Hyo (IKH).

No, “Ichimoku Kinko Hyo” ain’t Japanese for “May the pips be with you.” but it can help you grab those pips nonetheless.

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

Now that’s 3-in-1 for y’all! Also, know that we mainly used this indicator on JPY pairs.

To add to your Japanese vocab, the word 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.”

Huh, what does all that mean?


A chart might make things easier to explain…

Ichimoku Kinko Hyo

Whoops. That didn’t help. A few more lines and this will resemble a seismograph.

Before you go off and call this gibberish, let’s break down the components of IKH so it’s easy to understand.

But before we do that, there are a couple of things about this indicator that you should know about first:

  • Ichimoku can be used in all time frames for any tradeable asset. (It was originally used to trade rice!)
  • IHK can be used in both rising and falling markets.

When Can It Not Be Used?

So when CAN’T you use Ichimoku?

When no clear trend exists.

When the market is trading sideways, choppy, aka trendless.

You’ll know it’s trendless when the price oscillates on either side of the cloud.

Got it! Excellent.