Binary Options Trading provides a lot of options when it comes to trading methods and techniques to it’s traders. When you start your trading endeavour you should look through those options and experiment with these analysis tools to find out which systems suits your trading methods and which turn out to be the most profitable for you when you trade. Among many analysis tools one to be noted which has turned out to be very profitable is the Cloud/Kumo also known as Ichimoku Kinko Hyo.
Cloud/Kumo system is a very easy to understand system and provide a lot of information to the traders. This system uses total of Five Indicators to operate and when it is charted to give out information to the trader, the analysis is extensive and detailed. Although it is using Five Indicators to provide detailed data it is easy to read for the trader and the key points are really there and stand out for the ease of the trader. By it’s name you can easily assume that this analysis technique was first developed out of Japanese Stock Market.
To understand it’s working as a Trend Indicator the five indicators used to plot it on a chart are Kijun Sen,Chikou Span, Tenkan Sen, Senkou Span A & B. When plotted the difference between the Senkou Span A & B’s lines result in a formation of a cloud on the chart. When a trader goes through this chart support and resistance levels, strength of the trend, potential reversal points, equilibrium and trend information are all there at a single glance.
The formation of the cloud on the chart is the key indicator. One of two possibilities are depicted by that cloud. The first is if the market price is above the cloud the market is about to go on a downward trend and the second one is that if the market price is below the cloud the market is about to go on an upward trend.
The extensive information available for the trader to analyze and the accuracy it presents along with that information makes Cloud/Kumo system one of the popular trend indicators in Binary Options Trading.