Ichimoku Kinko Hyo indicator
What is the Ishimoku indicator?
Ichimoku Kinko Hyo indicator - trading technical indicator designed to reflect the trend, support and resistance levels.
What is the purpose of the Ishimoku indicator?
Ishimoku Kinko Hayo is designed to determine the market trend, support and resistance levels and to generate buy and sell signals. Optimal timeframe for Ishimoku indicator - week or day. It can be used in conjunction with other technical indicatorsYou can only trade on it. Sometimes Ishimoku indicator is called a ready-made trading strategy.
How to install the Ishimoku indicator on the price chart?
The Ichimoku indicator is included in the standard set of technical indicators of the MetaTrader 4 platform. To install it on the chart, go to "Insert" - "Indicators" - "Trending" - "Ichimoku Kinko Hyo".
If for some reason the Ishimoku indicator is missing in the terminal, it can be downloaded for free from almost any resource.
What does an Ishimoku indicator consist of?
At the heart of Ishimoku indicator there are 4 lines for different time intervals: Tenkan-sen, Kijun-sen, Senkou Span A, Senkou Span B. Each line shows the average value for the selected period. The additional Chinkou Span shows the closing price of the current candle, shifted backward by the value of the second period. The area between the lines is called "cloud", and if the price gets into it, we can say that there is no trend on the market.
How to trade using the Ishimoku indicator?
The Ichimoku indicator can be used in trading in three ways:
The first way - crossing the lines of the indicator
- Tenkan sen crosses Kijun, if the crossing is from the bottom up, you can buy, and vice versa, when the fast crosses the slow down - you should sell;
- Senkou span A crosses Senkou span B - the same scheme: if the line "A" crosses the line "B" from top to bottom, then the trader opens a short position - to sell, and when this crossing occurs from bottom to top - long - to buy.
The second way - trading on the breakout and rebound
If we understand that the indicator lines are levels of the current trend, we can use the signals of Ishimoku to break through these levels and to break away from them. That is, observing the price, the trader always knows what is ahead of him - a change of trend or correction of one degree or another. We should also add here the exit from the Ishimoku cloud, which also indicates the breakdown of important price levels and therefore is a good signal for the entrance to the incipient trend.
The third way - trade on the Chinkou Span line
The third way is based on the behavior of the Chinkou Span. If the analog of "momentum" crosses the line of price movement from top to bottom, it is possible to place the order "Sell", and in case it occurs in the direction from bottom to top, it is safely necessary to place the order "Buy".
Very often the Ishimoku indicator is the main element of the trend trading strategies.
You forgot the most important thing: the link to download the indicator.