We have already analyzed how the Kagi graphs represent, through the drawing of lines, the evolution of prices of a given index, currency or title. Let’s now analyse how to behave in a practical and operative point of view.

First of all, you can choose among three different ways to approach the Kagi graphs. The first way consists in the breakout technique, which relies on the ability of the user in grasping the line’s movements and color variations. Another approach aims to open a new position when there is a variation in the thickness of the line ( therefore a colore change ) and to close them exactly when the middle point of the previous linea is exceeded.

Before you decide how to move, will need to set a reversal amount thatn can be determined either by points or by percentages and will allow you to contain damages if you do a bad movement and, therefore, exit the trend where you are in now.

Choosing the right reversal amount is essential for the correct use of this graph. Choosing a very small reversal will make you nervous and your activity will not be tranquil. On the other hand, if you choose a very big reversal, you will draw promising graphs but rather unreal, with the risk of giving away part of your benefit back to the market.