ChsaDos

ICHIMOKU INDICATOR EXPLAINED - AN INTRODUCTION

BITSTAMP:BTCUSD   Bitcoin / Dollar
4432 5 6
The kumo is the very "heart and soul" of the Ichimoku Kinko Hyo charting system. Perhaps the most immediately
visible component of Ichimoku , the kumo ("cloud" in Japanese) enables one to immediately distinguish the prevailing
"big picture" trend and price's relationship to that trend. The kumo is also one of the most unique aspects of Ichimoku as it provides a deep, multi-dimensional view of support and resistance as opposed to just a single, uni-dimensional level as provided by other charting systems.

This more encompassing view better represents the way in which the market truly functions, where support and resistance is not merely a single point on a chart, but rather areas that expand and contract depending upon market dynamics.

The kumo itself is comprised of two lines, the Senkou span A (red line) and the Senkous pan B (blue line). Each
of these two lines providestheirown measure of equilibrium and together they form the complete view of
longer-term support and resistance .

Between these two lines lies the Kumo "cloud" itself (purple area).

One can gain sentiment of the market by watching for Tenkan/Kijun crosses in relation to the cloud. They vary in different degrees of signlas as follows:

STRONG TENKAN SEN/KIJUN SEN CROSS SIGNAL
A strong tenkan sen/kijun sen cross Buy signal takes place when a bullish cross happens above the kumo.
A strong tenkan sen/kijun sen cross Sell signal takes place when a bearish cross happens below the kumo.

NEUTRAL TENKAN SEN/KIJUN SEN CROSS SIGNAL
A neutral tenkan sen/kijun sen cross Buy signal takes place when a bullish cross happens within the kumo.
A neutral tenkan sen/kijun sen cross Sell signal takes place when a bearish cross happens within the kumo.

WEAK TENKAN SEN/KIJUN SEN CROSS SIGNAL
A weak tenkan sen/kijun sen cross Buy signal takes place when a bullish cross happens below the kumo.
A weak tenkan sen/kijun sen cross Sell signal takes place when a bearish cross happens above the kumo
ChsaDos
2 years ago
It should be noted, the weak/neutral/strong signals referenced in the chart are referring to bearish crosses.
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rtonkins
2 years ago
This explains the weak/ neutral/ strong signals a bit better: http://www.ichimokutrader.com/signals.html
This is the best introduction to Ichimoku I have ever seen: https://www.youtube.com/watch?v=Y9QM8WRRWzE&list=UUR3xDeSfad5koXql_Ig0EEg
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ChsaDos rtonkins
2 years ago
Love that first link - great visualizations. I considered going back throughout the historical BTC graph showing each but decided it would be way too much work :D
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rtonkins
2 years ago
I shared because your diagram is a bit misleading as there can be weak or strong crosses above and below the cloud depending on which direction the cross is occuring. A bull crossover above the cloud would be a strong indicator whereas a bear crossover above the cloud would be a weak indicator. The opposite would be true under the cloud A kumo twist can be an indicator also. Ichimoku so supportive in reading the market. Great job trying to educate folks!
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ChsaDos rtonkins
2 years ago
Correct, hence the first comment above stating the chart was referencing a bearish scenario :)
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