- Ichimoku Kinko Hyo
- Calculation
- Signals
Ichimoku Kinko Hyo
- The Ichimoku Kinko Hyo was developed by Goichi Hosoda
- He offered it to the public when he published his book in 1969
- Defines supports and resistances, identifies trend direction, reflects momentum, and provides trading signals
- Ichimoku translates as “a glance” or “one look”
- Kinko Hyo translates as “the table of equilibrium” or “balance table”
- The Ichimoku Kinko Hyo was developed by Goichi Hosoda
- He offered it to the public when he published his book in 1969
- Defines supports and resistances, identifies trend direction, reflects momentum, and provides trading signals
- Ichimoku translates as “a glance” or “one look”
- Kinko Hyo translates as “the table of equilibrium” or “balance table”
Ichimoku Kinko Hyo Plots
- Tenkan-sen uses a default of 9 periods
- The highest highs and lowest lows are the highest and lowest values of the specified number of time periods
- Kijun-sen uses a default period of 26
- Plotted 26 periods in the future and their difference forms the Kumo (cloud)
- Senkou Span A forms the faster cloud boundary
- Senkou Span B forms the slower cloud boundary
- The fifth plot is the Chikou Span which has a default period of 26 and is simply the current close plotted 26 periods in the past
- Tenkan-sen
- Kijun-sen
- Senkou Span A
- Senkou Span B
- Chikou Span
Kumo - Interpretation
- Senkou Span A vs Senkou Span B
- The area between the two Spans is the Kumo
- Trend is down when prices are below the cloud
- Trend is neutral when prices are inside the cloud
- Trend is up when prices are above the cloud
- Colour of the cloud indicates trend strength
- The downtrend accelerates when Span A falls below Span B
- This situation produces a red cloud
- The uptrend strengthens when Senkou Span A, crosses above Senkou Span B
- This situation produces a green cloud
Tenkan-sen/Kijun-sen - Interpretation
- Tenkan-sen vs Kijun-sen
- A bearish signal is generated when Tenkan-sen crosses below Kijun-sen
- A bullish signal is generated whenTenkan-sen crosses above Kijun-sen
- Tenkan-sen and Kijun-sen can also be used as supports and resistances
Chikou Span - Interpretation
- Chikou Span vs Close
- When the Chikou Span is below the prices, the trend is considered to be Bearish
- When the Chikou Span is above the prices, the trend is considered to be Bullish
- Many traders use the crossover with the price as a buy or sell signal
Ichimoku Kinko Hyo - Conclusion
- Movements above or below the cloud define the overall direction
- Within the trend, the cloud changes colour as the trend ebbs and flows
- Crossover of Tenkan-Sen and Kijun-Sen generates signals
- Movements above or below the Chikou Span can be used to generate signals
- All 5 plots of the Ichimoku Kinko Hyo can be used as supports and resistances
