This forex trading tutorial discusses Introduction to Kagi Charts, How To Make Kagi Charts, How To Interpret Kagi Charts.
Kagi charts, consisting of thin and fat vertical lines, connected by short horizontal lines. The Kagi schedule was developed in Japan in the 1870s with the beginning of the development of the Japanese stock market. This technique was used to determine the movement of the price of rice. The word "Kagi" comes from the Japanese art of printing, it is a plate in the form of a Latin letter L, used to align a sheet of paper for printing. Western traders discovered this technique by Steve Neeson in his book "Beyond the Limits of Japanese Candles."
The graph of Kagi does not have a time axis. The graph of Kagi looks as follows:
The thickness of the lines Kagi (Kagi) varies depending on the price action. The thick line is called the Yan line, and the thin line is called the Yin line. The points where the direction of the line changes from the top down, are called "shoulders", and the points of change from the lower direction upwards are called "waists".
When the line Yin (thin) moves above the previous "shoulder", it becomes the line Yang (fat). Similarly, when the Yan line moves below the previous "waist", it becomes the Yin line.
Note the first closing price. It is called the "base price".
The simplest way to interpret the graphs of Kagi can be described by the phrase Stephen Nison "Buy on Yan, sell on Yin."
When Kagi's line of thin becomes fat, prices have risen above the previous high - it's a bullish signal. The converse is also true: if Kagi's line of fat became thin, then prices fell below the previous low - this is a bearish signal.
Support / resistance levels, graphical analysis, and trend analysis methods can also be used on Kagi charts. In fact, it is even easier to determine the levels of support or resistance.
Another way of interpretation, indicated by Steve Neeson, is to find a sequence of 8-10 (often going one behind the other) "shoulders" or "waists." Usually, after this, a strong movement in the opposite direction is expected.
Subscribe Updates, Its FREE!
|How to use MACD indicator effectively? (with pictures)|
|50 basic combinations of Japanese Candles|
|How to use Parabolic SAR indicator in Forex?|
|How to Use ADX (Average Directional Index) in Forex|