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One of the most indicators that some find visually complex, but are very powerful when understood correctly: Ichimoku
Today's indicator: Ichimoku Cloud
Why do many traders pay attention to it?
Because it doesn't give you just one piece of information, but helps you read:
• The overall trend
• Dynamic support and resistance zones
• The strength of the movement
• Whether the market is in balance or in acceleration
• Whether the current signal is supported by the context or not
What does it practically offer you?
• Shows you whether the price is in an uptrend or downtrend
• Helps you see support and resistance areas through the cloud
• Gives you an idea of trend strength from the shape and slope of the cloud
• Useful for filtering out weak signals
• Combines more than one element in a single tool
Best way to use it:
With the overall trend + price movement + not rushing to take any crossover alone
Important:
The abundance of lines does not mean the indicator is uselessly complicated, but the mistake is to use it very superficially.
The real question is not:
“Did a crossover happen?”
But:
“Where did the crossover happen? Above the cloud, inside it, or below it?”
Do you want me to explain Ichimoku as just a simple cloud, or to detail its components part by part?