Like any new forex trader, I was looking for that reversal bar that will end a trend. To my surprise, sometimes, its not a reversal pin bar which will end the trend. Sometimes, its an inside bar. Here is a screenshot of the culprit.
The inside of an inside bar can be a series of different bars. What you want to do is wait for the last bar which will tell you what will be the next trend. An inside bar is an indication of a new trend forming or an end of the trend for those who are already riding the wave and needs to get out.
There are lots of ways to trade forex. And I have tried most of the indicators out there. Some of them work, some of them don’t. Some did work, but I’m not particularly comfortable using. And thru the years, I came to settle down with candlesticks and ichimoku.
Ichimoku or short for Ichimoku Kinko Hyo is a japanese indicator that tries to complement where the candlesticks left of. When using candlesticks, it tells us the story what happened during the trading day, but there’s something lacking when you look at the charts as a whole. Where are the support? Where are the resistances? Where is the trend going? Is it going strong or weak? What is the future of the trend? Ichimoku as its name implies, is a “one glance” indicator. When looking at it once, you’ll immediately know where are the important levels are.
In ichimoku, you will know where the resistance and support are. The Japanese who made the indicator believed that support and resistances are not flat lines. They vary wherever the price goes. It can be strong or weak, as indicated by a big or small cloud. And with ichimoku, you’ll also have an idea of the “future” with its future kumo cloud.
If all these things sounds confusing to you at first, bear with me. During the course of the following weeks, I’ll teach you how you could harness the power of this great indicator and hopefully share to you my knowledge on how to use them. You will know why I started to love this indicator.
So without further ado, I welcome you to the “How to Trade Forex with Ichimoku” series.