ICHIMOKU KINKO HYO (THE BEST TREND INDICATOR)

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)