What is Ichimoku?
The ichimoku indicator, also known as Ichimoku clouds, is an indicator that helps identify support, resistance and trends in financial markets. This indicator, also known as Ichimoku kinko Hyo, is also known as “equality graph”. With a single image, trending and trending potential signals can be seen. Indicator was developed in 1969 by Japanese journalist Goichi Hosoda. It is actually a useful and simple indicator even though it looks very complicated when you look at the graphs.
Ichimoku In order to understand what the index is, Ichimoku Kinko Hyo analysis will be useful in describing what the terms mean, because we will keep track of these terms on the graphs continuously.
- Tenkin Sen: 9-period moving average is the default value.
- Rigged Sen: 26-period moving average is the default value.
Moving averages help me find where the nearest support and resistance levels are.
Naturally, the first level of support will function if the 9-period moving average prices in the emerging market are closer to that of a retreat. The 26-period moving average, which follows the prices further, takes on the next support function. The same rules apply for the declining market.
- Senkou Span A: It is obtained by dividing the 26-period moving average by 9-period moving average and dividing it into two, then shifting the obtained value by 26-period forward. Senkou Spana acts like a weighted average of 26 periods.
- Senkou Span B: is obtained by dividing the highest and lowest values in 52 periods by half, then shifting the obtained value by 26-period forward. In other words, Senkou Span B is the middle point of 52 periods (50% withdrawal rate).
* Ichimoku Cloud: The area between Senkou Spana and Senkou Span B.
If prices are able to penetrate the cloud and penetrate the cloud, the trend is predicted to continue in that direction. In other words; falling down the parity cloud, ascending the parity cloud, the ascension current begins to dominate.
The thickness of the clouds is also an important point. The cloud is thicker than the support (or resistance) in the region; we can say that the cloud is thinner than the support (or resistance) in the area where it is thin. Currents are more likely to change direction at these points.
- Chikou Span: Obtained by shifting the closing price back by 26 periods. It is a default value, but can be changed if desired.