The The Ichimoku Kinko Hyo, usually called ichimoku, is an indic... More, usually called ichimoku, is an indicator that gives frequent trading signals.
Like the Japan (Japanese: 日本, Nihon or Nippon) is an island nati... More. Ichimoku kinko hyo roughly translates as “instant look at the balance chart”., this indicator also originates from
Because ichimoku has more data points than standard candlestick charts, it gives a clearer picture of potential What are value stocks? A value company is a company that app... More used for candlesticks. Time is also factored in alongside the What is price action in trading? Price action describes the ... More.. The lines are based on the 50% point of the highs and lows, compared with the closing
The Elements of the Ichimoku Kinko Hyo
Tenkan Sen (twisting line): (highest high + lowest low) / 2 from the last 9 periods
Kijun Sen (standard line): (highest high + lowest low) / 2 from the last 26 periods
- Chikou Span (delayed line): the actual course shifted 26 periods back in time
- Kumo (cloud): oscillator built with the difference between Senkou Span A and Senkou Span B
- Senkou Span A: median of Tenkan Sen and Kijun Sen that is projected 26 periods into the future
- Senkou Span B: median of the highs and lows of the previous 52 periods, again projected 26 periods into the future
These are the standard values and can be adjusted by the What is a trader? A trader is a person who buys and sells... More.
Interpretation of the indicator
- If price is above the cloud (kumo), it is said that the is in an .
- If price is below the cloud, it is assumed the asset is in a
- The border lines of the clouds, meaning the Senkou Span A and B, also show possible levels of and , particularly when they are horizontal.
- The thickness of the cloud has meaning — the thicker the cloud, the stronger the What are "support levels" in trading? A support level is a... More or What are "resistance" levels in trading? A resistance level ... More level is supposed to be. The What is price? The price is the measure of the value of good... More can therefore break through thin clouds rather easily.
The Chikou Span can be used to determine the direction of the trend. If it is above the actual price, it confirms a What is a market trend in trading? A market trend is the ten... More.trend; below the actual price confirms a
The sell and buy signals are given by the Tenkan Sen and the Kijun Sen. The red line crossing the blue line in an upward motion is a buy signal.
For better confirmation, this should happen above the cloud, and the Chikou Span should be above the candles.
If the red line crosses the blue in a downward motion, this is a signal to sell. As before, if this occurs below the cloud and the Chikou Span is below the actual price, this is clear confirmation.