stephenleachman
Education

ICHIMOKU KINKO HYO (THE BEST TREND INDICATOR)

FX:EURNZD   Euro Fx/New Zealand Dollar
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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 .
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.
Comment: 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)
excellent
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Very handy cheat-sheet, thank you

Recently started to learn about this indicator and I am fascinated by it.
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Excellent, Thank you for sharing.
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Thank you so much for your explanation. You make everything so easy to follow. Thanks
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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?
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Nice work !. Thanks
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Best explanation about Ichimoku Kinko Hyo.
Thank you.
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Mizuki32 Mizuki32
Hello, again!
Following web site seems to be well organized.
http://www.ichimokutrader.com/signals.html

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?
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