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Ichimoku Kinko Hyo index

22-11-2017 | No Views : 427

Ichimoku Kinko Hyo index is widely understood to be an integrated trading system. It has five indicators and has more than one use. It is a trend indicator and is also used to identify support and resistance areas.
The Japanese journalist Hosoda Kinko Hui created the Ichimoku Kinko Hyo index with the help of many of his aides, and published it in 1968. But the index has spread over the past few years, and it is characteristic of the indicator that it shows the direction of the price with the support and strong resistance on the chart, identifying the points of purchase and selling.

Configuration of Ichimoku Kinko Hyo

Configuration of Ichimoku Kinko Hyo

The index consists of five lines as shown in the image attached to the top, and each line of them is a single indicator of this is called an integrated trading system, and here we will explain each of the lines of the indicator are as follows.

Tenkan Sen

Is an average price but differs from the moving averages in that it calculates (the highest price + the lowest price) / 2 for the previous nine days, and has a red color on the graph.


It is also average for the price but less sensitive to price change, as it calculates (the highest price + the lowest price) / 2 for the previous 22 days, the owner of blue in the attached pictures.

Up Kumo

The upper cloud line is the total (Tenkan-Sen + Kijun-sen) / 2, and the previous price is 26 days ahead and is called the fast command line.

Down Kumo

The bottom cloud line calculates (the highest price + the lowest price) / 2 for the previous fifty-two days, and also precedes the price 26 days ahead like the upper cloud line, and is called slow command line.
The distance between the upper cloud line and the bottom cloud line is called cloud.

Chikou Span

This line represents the price action but is pushed backwards 26 days, and is called the following line.
The large number of lines on the chart may be a source of inconvenience and suggest that it is difficult to use the indicator, but the opposite is true and we will talk about the usefulness of the indicator and how to use it in the analysis and trading.

Determination of direction by Ichimoku Kinko Hyo

It is easy to know the direction through the index, if the price is moving above the cloud, and the line of the upper cloud above the line of the bottom cloud is the upward trend, if the bottom line of the cloud moves above the top cloud line, and the price is moving down the cloud this is a sign that the trend is bearish.
Also, the medium-high intersections with the slow medium indicate a trend. If the Tenkan-Sen cuts the slow average line (Kijun-Sen) from the bottom up, it is a sign that the trend is bullish and vice versa.
The movement of the price through Japanese candlesticks or bars inside the cloud, is a sign that the trend is accidental and prefer to stay away from trading at these times.

Determination of direction by Ichimoku Kinko Hyo

It is worth noting that the Ischoku Kinko-Huo index is basically a trend line, and its signal is strong and useful in the direction of the clear market, while in the case of volatility and the cross-section, its signals are useless.

Ichimoku Kinko Hyo support and resistance

Another advantage of the indicator is that it helps in determining support and resistance. When the price is above the cloud then the cloud limits represent support for the price.

Ichimoku Kinko Hyo support and resistance

Also when the price is inside the cloud then the upper line of the cloud is resistance to the price, and the bottom line of the cloud represents support.
Dear reader, we have completed the preliminary explanation of the Japanese index Ishmuko Kinko Hugh, and in the next lesson we will deal with advanced strategies to trade using the index professionally and at low risk.

Technical indicators in the technical analysis of financial markets Part III Trading on the support and resistance in the Forex
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