Inspired by serendipitous events today I wanted to make this video about Ichimoku and how it can be used to analyze and confirm price trends. I use the TVC:DXY as an example because it is of topical discussion by everyone.
In this video I show how to use the most prominent feature of Ichimoku, the Ichimoku Cloud, in tandem with the Chikou as momentum to confirm price trends as they are about to change.
Awesome introductory video to the basics of Ichimoku clouds! We featured it on Editors' Picks and we hope it helps others start to explore Ichimoku. For those looking for more including custom Pine Scripts and trade ideas, please visit our Ichimoku page: tradingview.com/scripts/ichimokuclouds/
Michael_Harding
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interesting. Can you explain how the cloud is derived?
norok
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@Michael_Harding, The cloud is made up of two lines called the Senkou A and Senkou B.
The Senkou B is the 52 period median... shifted forward 26 bars (using default values).
The Senkou A is the median of the two shorter median lines; Tenkan Sen and Kijun Sen... shifted forward 26 bars.
I may get around to a more detailed explanation of the mechanics in a future video.
Mayday919
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@Michael_Harding, Hello Michael, in order for you to understand the cloud, I'm going to explain a couple of other things.
First thing, when you pull out Ichimoku on your chart, you'll see:
- A blue line: Which is called the Conversion Line, this line represents the average of the highest and lowest price for the last 9 candles. ( Formula: Highest price of the last 9 periods + Lowest price of the last 9 periods divided by 2)
- A red Line: Which is called the Base Line, this line represents the same thing as the Conversion line, but the difference, is that this line is for the last 26 candles. (Formula: Highest Price of the Last 26 periods + Lowest price of the last 26 periods, divided by two)
Now I explained these, because the Cloud is formed by two other Lines called: Leading Span A, and Leading Span B.
- Leading Span A: Is a Line that represents the average of the Conversion and Base Line ( Formula: Conversion line + Base Line, divided by two), shifted forward 26 periods.
- Leading Span B: Is a Line which represents the Average of the Highest and Lowest Price of the last 52 candles. ( Formula: Highest Price of the last 52 candles + Lowest price of the last 52 candles, divided by 2) shifted 26 periods forward.
Together these two lines form the Cloud.
And finally, the Lagging Span is the current price shifted backwards 26 periods.
If you push your face away from the screen and look at Ichimoku, you'll see that it gives you:
- The Past: Lagging Span
- The Present: Conversion and Base Line
- The Future: Leading Span A, Leading Span B, and The Cloud.
Which is why it is called Ichimoku Kinko Hyo: One Glance Equilibrium Chart.
Hope this helped in some way.
Sincerely,
purmasuryateja65
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awesome explanation sir thank u 👌
Prasad_Ari
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@norok, I an wonderful educational video!! Please continue your excellent work to inspire Traderingview community!!
StairsTrades
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Great quality content ! Thank you.
makmal95
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I love it. Thank you, That was a good video.
Learned so much.