Article Currency Trading with Ichimoku Kinkou-Hyo

T2W Bot

Staff member
1,503 117
The Ichimoku Kinkou-Hyo is a technical study that was developed by a Tokyo newspaper writer, Goichi Hosoda, before World War II as a self-standing forecasting method for all financial markets.  The name is a bit of a mouth-full, so many traders only call it Ichimoku, but in loose translation the full name means ?One-look at the equilibrium prices.?  The name originated with Hosoda?s pen name "Ichimoku Sanjin," which means a glance of a mountain man.  This technical study consists of gauging midpoints of historical highs and lows at different lengths of time and several time lengths matched those used in the MACD?s moving averages. Ichimoku provides another method of analyzing trends and brings additional points to retracement/extension analysis, and support and resistance from moving averages.
Ichimoku Kinkou-Hyo
The Ichimoku system consists of five lines: Kijun, Tenkan, Chiku, Senkou Span A and Span B.  (See an application of this method as applied on the daily euro/dollar...

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FetteredChinos

Veteren member
3,897 40
A good explanation of a remarkably complicated indicator.

it looks like it does everything but make a cup of tea.

9/10
 

garethb

Well-known member
307 15
The Chiku line is the current close plotted 26 periods behind. If you look back at the chart when it is above the price then the price tends to rise over the following 26 periods and vice versa. To plot it at the right hand edge I need the close 26 periods into the future. My crappy broker doesn't supply this in the data feed which is a shame. Also he won't take orders for 26 days ago which is pretty unreasonable.

Or have I missunderstood something
 

Bluewave

Active member
240 2
It's easier to visualise the cloud area on a chart when it is filled in. Even so, while the Ichimoku is supposed to allow a quick reference for where the price is heading, it still makes your charts look like a toddler has attacked them with a crayon!

What time frame does the Ichimoku work best on? I'd guess the longer ones, above 1hr. I never seem to see the cloud offering much support or resistance; the price just seems to go straight through it! And where/how to exit exactly?
 

TheWolf

Member
72 0
Nice article. :) Bluewave, I'd only use the cloud as support/resistance when the cloud is relatively thick.

From the article, it seems that both the Kijun (trend) line and the cloud provide support /resistance? hmm
 

philhackett

Active member
113 10
This is an excellent article. I have précised it (below) to use as an aide memoir which I keep beside me when I trade. I have added colours to suit me. Today for example, the black crossed the pink as a trading signal but was within the two orange cloud lines, so I waited until the black and pink left the cloud for a good sell worth 30 pips. The market retraced and there was a very quick trading signal as black crossed pink BUT the orange cloud lines which had come together were just above the trade signal offering resistance which had to be breached. I waited for the candles and pink/black to cross them both for a nice long worth 48 pips. I suggest that the précis below is printed and read in conjunction with live charts.
This is a winning system and it works well in conjunction with the DMI with ADX overlayed as well as an Aroon indicator. It is ideal for anyone who needs to see a reason to enter a trade.
Kijun (Trend Line) Pink
Kijun means trend in Japanese. Consequently, if the trend line is heading down, then this gives a selling signal and if the kijun line is advancing, then this suggests a buying signal.


Tenkan (Signal Line) Black
The Tenkan line is a signal line that works in conjunction with the trend line (kijun). A crossover above the trend line gives a buy signal and a cross over below the selling line provides a sell signal.


Chiku (Lagging Line) Blue
The Chiku line, or the lagging line, is very important for the entire Ichimoku outlook. The lagging line is simply the current close plotted 26 periods behind.
If both the Chiku line and the market are in an uptrend, then this is a buy signal, and vice versa.


Senkou Spans A (Red) and B (Orange)(Cloud)
The two Senkou, or leading lines, create a Cloud-like formation, Kumo in Japanese, and this is an area of support or resistance. The market must break above the Cloud to give a buy signal or below the Cloud to give a sell signal. The Senkou lines are used in a similar manner as the standard support and resistance levels.
 

perrymansen

Newbie
1 1
A good starting information in a compact form for traaders who use this chart or have just started to muse it. Good!
perrymansen
 
 
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