Yes, you need indexes on all the foreign key columns. Otherwise, you need table locks to be disabled on any table that is missing a foreign key index. In my opinion, this is often the better solution. The APT script missing_fk_indexes.sql checks both conditions. So if that script is silent, then you have nothing to worry about.

Assume that table X1 references to X2 and X2 references to X3 and so on. X1 --> X2 --> X3 --> ... --> Xn-1 --> Xn where X1 is a "lowest child" table and Xn is a "super-parent". I'm not sure my terminology is correct.

I want to avoid possible problems with deadlocks. Is my current understanding correct that:
1. I should create index on corresponding FK field(s) for each table in the range 1...n-1
2. The n is not limited. I mean it is possible to encounter a deadlock when the n = 2, 3, 10, 20, ...