Ichimoku Kinko Hyo

Ichimoku Kinko Hyo Technical Indicator

The Ichimoku Kinko Hyo Technical Indicator is a tool used to characterize market trends, support and resistance levels, and generate buy and sell signals. It is most effective when used with weekly and daily charts.

Indicator Parameters and Line Descriptions

The indicator utilizes four different time intervals to determine its parameters. The values of the individual lines in this indicator are based on these intervals:

• Tenkan-sen shows the average price value during the first time interval, defined as the sum of the maximum and minimum within this time, divided by two.
• Kijun-sen shows the average price value during the second time interval.
• Senkou Span A shows the middle of the distance between the two previous lines, shifted forwards by the value of the second time interval.
• Senkou Span B shows the average price value during the third time interval, shifted forwards by the value of the second time interval.

Chikou Span

The Chikou Span line represents the closing price of the current candle shifted backwards by the value of the second time interval. The area between the Senkou lines, known as the cloud, is shaded with a different color. If the price is within this cloud, the market is considered non-trend and the cloud boundaries act as support and resistance levels.

Kijun-sen

The Kijun-sen line is used as an indicator of market movement. If the price is above this line, it is likely to continue increasing. When the price crosses this line, a trend reversal may occur. The Kijun-sen line also generates signals. A bottom-up crossover of the Tenkan-sen line with the Kijun-sen line indicates a buy signal, while a top-down crossover indicates a sell signal.

Tenkan-sen

The Tenkan-sen line is used to determine market trends. If the line is rising or falling, it indicates a trend. A horizontal movement suggests that the market is in a channel.

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Tenkan-senKijun-senSenkou Span ASenkou Span BChikou Span EURUSD · H1

Senkou Span A and B form the cloud, drawn 26 bars ahead; Chikou Span is the close drawn 26 bars back.

Calculation of Ichimoku Kinko Hyo

With the default periods 9, 26 and 52:

TENKAN-SEN = (MAX(HIGH, 9) + MIN(LOW, 9)) / 2
KIJUN-SEN = (MAX(HIGH, 26) + MIN(LOW, 26)) / 2
SENKOU SPAN A = (TENKAN-SEN + KIJUN-SEN) / 2
SENKOU SPAN B = (MAX(HIGH, 52) + MIN(LOW, 52)) / 2
CHIKOU SPAN = CLOSE

Where:

• MAX(HIGH, N) and MIN(LOW, N) are the highest high and the lowest low over the last N bars;
• Senkou Span A and Senkou Span B are drawn 26 bars ahead, and Chikou Span is drawn 26 bars back.