A couple of preliminary notes on how to approach the study of IKH:
1) All indicators boil down to and are only, ultimately, so many representations of historic price data points, as we know. IKH is not an indicator; it is a price overlay.
2) This is important to realize because IKH is easily mis-conceptualized and can be intimidating based off of appearance alone. In fact, IKH is nothing other than support and resistance.
3) The fundamental difference between IKH and the classic expression of S/R - and what can provide a verifiable edge if exploited correctly - is that IKH not only expresses the height and breadth of S/R, but also S/R depth. Depth goes beyond horizontal and diagonal lines to describe price volatility and price equilibrium. In short, there is information expressed through IKH about historic, present and future price behavior that is not available using line studies (including fibonacci, etc.) only. Depth of price , in my mind, is the thing so distinctive about IKH.
4) IKH does not preclude use of other indicators or overlays. It can be used as a filter, to supplement other overlays, or as the sole technical component of a system.
5) As I mentioned, IKH can seem overwhelming at first, or needlessly complicated. Maybe it looks revolting to those minimalists who prefer naked price. IKH is, at bottom, moving average data points manipulated according to a simple, specific logic. In other words, it is price. The melee IKH makes out of your chart is actually simple and elegant.
6) IKH is most effective on medium to long TFs: 4H, 1D, 1W. Below 1H (which is pushing it), success will be severely limited. If someone finds a way to effectively use IKH on the 30M or less, don't hesitate to chime in!
__________________
Andrewunknown - blog: andrewunknown.com
Test everything; hold on to the good.
-- 1 Thessalonians 5:21
Last edited by Andrewunknown; 06-22-2008 at 11:07 PM.
|
Linear Mode
