|Welcome to currency trading with Profiforex!
|Subsequently, the window in which we change three indicators' properties appears.|
These settings have the following meanings:Tenkan-sen shows an average price for the first period, defined as a sum of maximum and minimum of this period divided by two. Kijun-sen indicates an average price for the second period.
Senkou Span B shows an average price for the third period, moved forward by the length of the second time period.
After imposing this indicator on the chart we see a colorful picture that isn't easy to understand.
It can be said that Ichimoku Kinko Hyo is one of the most ambiguous technical indicators. It has many believers, and it has many skeptics.Ichimoku Kinko Hyo is intended for the determination of market trends, support and resistance levels, and the generation of buy and sell signals.It works best with weekly and daily charts.
|The distance between the Senkou lines is dashed on the chart by another color and called "Cloud."|
|If the price is between these lines, the market is considered a non-trend,|
and the borders of the cloud form support and resistance levels.
|If the price is above the cloud, its upper line becomes the first support level and the second line becomes the second support level.|
|If the price is under the cloud, the down line becomes the first resistance level and upper line becomes the second resistance level.|
|If Chinkou Span crosses the price chart from the bottom upward, it's the signal for buying.|
If it crosses from the top downward, it's the signal for selling.
|Kijun-sen ("Main line") is used as an indicator of market movement.|
|If the price is higher than Kijun-sen, prices will possibly continue to rise.|
|Tenkan-sen ("Reverse line") is used as a market trend indicator.|
|If this line rises or falls, a trend exists.|
When it's horizontal, the market has entered the channel.
The description states that each line is the midpoint of the price range for a given period of time.
The touted Ichimoku Kinko Hyo advantage is that any Ichimoku line has an instantaneous reaction on the new extreme in its time period. There is no time delay. During a trend, it's a very useful feature.However, in a flat period it causes numerous false signals (which are partly filtered by two lines).
It should also be said that the Chinkou Span line represents our old acquaintance "momentum," which is not known to be an ideal indicator.
The authors recommend entering line figures (gradually): 9, 26, 52, 26. As is noted in the standard description, these figures are the best for the Nikkei Index market, i.e. the Japanese capital market.
Because the indicator was created for long-term movements, it can barely be applied to intraday trading.