Ichimoku Kinko Hyo “one look equilibrium chart” In my personal opinion is the best all in one indicator, it defines support and resistance, identifies trend direction, gauges momentum and provides trading signals. The best part about ichimoku is not only that it gives you a directional bias "at one glance" but also it provides trading signals. These signals can be used by themselves or together and are very powerful. There are 5 signals and are as followed: Bullish Signals:
Kijun-Sen Cross - A bullish signal occurs when the price crosses from below to above the Kijun Sen. A weak bullish signal occurs when the cross is below the Kumo. A neutral bullish signal occurs when the cross is inside the Kumo. A strong bullish signal occurs when the cross is above the Kumo.
Tenkan-Sen / Kijun Sen Cross (TK Cross) - A bullish signal occurs when the Tenkan Sen crosses from below to above the Kijun Sen. A weak bullish signal occurs when the cross is below the Kumo. A neutral bullish signal occurs when the cross is inside the Kumo. A strong bullish signal occurs when the cross is above the Kumo.
Senkou-Span Cross (Kumo Twist) - A bullish signal occurs when the Senkou Span A crosses from below to above the Senkou Span B. A weak bullish signal occurs if the current price is below the Kumo. A neutral bullish signal occurs if the current price is inside the Kumo. A strong bullish signal occurs if the current price is above the Kumo.
Chikou-Span Cross - A bullish signal occurs when the Chikou Span rises from below to above the price. A weak bullish signal occurs if the current price is below the Kumo. A neutral bullish signal occurs if the current price is inside the Kumo. A strong bullish signal occurs if the current price is above the Kumo.
Kumo Breakout - A bullish signal occurs when the price goes upwards through the top of the Kumo.
Bearish Signals:
Kijun-Sen Cross - A bearish signal occurs when the price crosses from above to below the Kijun Sen. A weak bearish signal occurs when the cross is above the Kumo. A neutral bearish signal occurs when the cross is inside the Kumo. A strong bearish signal occurs when the cross is below the Kumo.
Tenkan-Sen / Kijun Sen Cross (TK Cross) - A bearish signal occurs when the Tenkan Sen crosses from above to below the Kijun Sen. A weak bearish signal occurs when the cross is above the Kumo. A neutral bearish signal occurs when the cross is inside the Kumo. A strong bearish signal occurs when the cross is below the Kumo.
Senkou-Span Cross (Kumo Twist) - A bearish signal occurs when the Senkou Span A crosses from above to below the Senkou Span B. A weak bearish signal occurs if the current price is above the Kumo. A neutral bearish signal occurs if the current price is inside the Kumo. A strong bearish signal occurs if the current price is below the Kumo.
Chikou-Span Cross - A bearish signal occurs when the Chikou Span falls from above to below the price. A weak bearish signal occurs if the current price is above the Kumo. A neutral bearish signal occurs if the current price is inside the Kumo. A strong bearish signal occurs if the current price is below the Kumo.
Kumo Breakout - A bearish signal occurs when the price goes downwards through the bottom of the Kumo.
Also all 5 lines can be used to provides levels of support and resistance. Note the Kijun-sen can be the strongest level of support or resistance, it is the equilibrium level and as the market gets over extended price will eventually return to Kijun-sen (equilibrium). Chikou-span prints itself in the past, by using its pivots will also provide strong levels of support and resistance. This illustration is based on the conventional way of trading the ichimoku. The settings can be configured to better fit the market, however I mainly use the default settings. My preferred time frame with ichimoku is on the 30 min, 1 hour, 4 hour and daily charts.
Komen
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Remember there is a strong bullish trend when price is above the Kumo cloud and above Tenkan-Sen and Kijun-Sen. Also Senkou-Span is above and out of price. There is a strong bearish trend when price is below Kumo cloud and below Tenkan-Sen and Kijun-Sen. Also Senkou-Span is below and out of price.
Komen
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Ichimoku History - It was developed in the late 1930s by Goichi Hosoda a Japanese journalist who used to be known as Ichimoku Sanjin, which can be translated as "what a man in the mountain sees" He spent 30 years perfecting the technique before releasing his findings to the general public in the late 1960s. (History from wikipedia)
Hi.If kumo break out. the price will retrace back or continue to up?If retrace how it retrace strong or weak. like 50% retrace?
TheGreatBullOnTheStreet
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I think that statement is little bit controversial:
quote: "Jul 17, 2016
Comment: Remember there is a strong bullish trend when price is above the Kumo cloud and above Tenkan-Sen and Kijun-Sen. Also Senkou-Span is above and out of price. There is a strong bearish trend when price is below Kumo cloud and below Tenkan-Sen and Kijun-Sen. Also Senkou-Span is below and out of price."
in this concrete part:
quote: "....strong bullish trend when.... Also Senkou-Span is above and out of price. "
"....strong bearish trend when...Also Senkou-Span is below and out of price."
you actually saying that, when there is strong bearish trend the cloud should be above the price, and when there is a strong bearish trend the cloud should be below the price, are you?
please correct me if I'm wrong about that
TheGreatBullOnTheStreet
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btw, great educational article! Really nice job! Very appreciated!
Mizuki32
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Best explanation about Ichimoku Kinko Hyo.
Thank you.
As far as I know, Ichimoku Sanjin's original books are printed only in Japanese by Keizaihendousouken Co., Ltd.
Where did you study Ichimoku Kinko Hyo?
What is the best book of Ichimoku's charts in English?
I'm an ichimoku trader bro! cheers for the best charting system out there
jjohnsonjai
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Thank you, this could be a useful tool to verify what I believe will occur in price. It will take some time to get used to though.
Luciano45911
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Very good, inspired by your explanation I was able to create a robot on metatrader 5 based on the traded signals you described, and, surprisingsly, it made something about 300% profit since 2016 trading Mini Ibovespa index futures on daily chart, expectacular!