Technical Analysis Using Ichimoku Kinko Hyo in a PAMM Trading System

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Ichimoku Kinko Hyo is an indicator found by a Japanese, named Goichi Hosada. This is a very complete and multi-functioned indicator. It was designed to give support/resistance level, predict the trends, and also determine the exit-entry points. The meaning of  the phrase Ichimoku Kinko Hyo is : An Equilibrium Chart at a Glance. So, we can easily know what is going on within the market by seeing this smart indicator.

The most important part of this indicator is the existence of the cloud. In Japanese, this cloud is called “Kumo”. PAMM traders may use this cloud to determine where the resistance or support point is, how thick it is and even predict the trend movement within the market. If you are a PAMM investor, and your trader is using this indicator, it will be a good news for you. By using this indicator, your PAMM trader will get a comprehensive information as their consideration to take a correct action.

A PAMM trader can simply know that the trend is going up if the price is above the cloud. And when the price is below this cloud, the trend is going down. When price is inside the cloud means this is a sideways condition where price is struggling, whether it will be up or down. This cloud is usually changing in its thickness and thinness.

The other advantage a PAMM trader will receive from the Ichimoku tool is that the cloud is still shown even until it passes the last price. So, trader will be able to predict the future price even when the price has not been created.

This indicator has four lines, which are :

1. Kijun Sen: this is a base line, calculated by averaging the `highest high and the lowest low lines in the past 26 periods.

2. Tenkan Sen: is the turning line. The line came from the calculation of the average number of the maximum and minimum prices in the past nine periods.

3. Chikou Span: it’s called the lagging line. This line is the current closing price that is plotted 26 periods behind.

4. Senkou Span: consists of two different lines. The first line is the result from averaging the Tenkan Sen and Kinju Sen, which is designed 26 periods frontward. The second line is determined by averaging the highest high and the lowest low for the past 52 periods and put 26 periods frontward.

For your information, basically the Tenkan and Kijun Sen have the similar function as the Moving Average period 9 and 26. They are trend indicator types. The difference is that the way they are calculated. MA is determined by averaging all the closing points in a certain period, while Tenkan and Kijun Sen were determined only by averaging the highest high and the lowest low. Because of this different way of calculation, MA has higher sensitivity than Tenkan and Kijun Sen.

Well, now you are having sufficient information about Ichimoku indicator, right? A complete and multi-functioned indicator that give you a comprehensive view about the market trend. By using this indicator, it is no need for you to place another indicator anymore.

Happy trading in PAMM Investments !

Don’t forget to read this important article for PAMM trader

1. How to become a PAMM Trader

2. Understanding your Forex Trader Level as PAMM Trader