Ichimoku -At a glance.
Ichimoku Cloud (or Ichimoku Kinko Hyo) is a technical analysis method that combines leading and lagging indicators with traditional candlestick charts in order to provide a comprehensive trading system. Developed by Japanese journalist Goichi Hosoda in the 1960s, Ichimoku Kinko Hyo is translated as “one balance equilibrium chart”, while the common name of Ichimoku Cloud refers to its appearance. Ichimoku can be displayed as a separate indicator in Minute, Hourly, Daily, Weekly or Monthly format.
When price is above the clouds and future clouds turn from red to green, we are in an uptrend.
The clouds lead the price by 26 periods (days)
(Blue Line above)
(Conversion Line): (9-period high + 9-period low)/2))
The default setting is 9 periods and can be adjusted. On a daily
chart, this line is the mid point of the 9 day high-low range,
which is almost two weeks.
(Red Line above)
(Base Line): (26-period high + 26-period low)/2))
The default setting is 26 periods and can be adjusted. On a daily
chart, this line is the mid point of the 26 day high-low range,
which is almost one month).
Senkou Span A (Leading Span A): (Conversion Line + Base Line)/2))
This is the midpoint between the Conversion Line and the Base Line.
The Leading Span A forms one of the two Cloud boundaries. It is
referred to as “Leading” because it is plotted 26 periods in the future
and forms the faster Cloud boundary.
Senkou Span B (Leading Span B): (52-period high + 52-period low)/2))
On the daily chart, this line is the mid point of the 52 day high-low range,
which is a little less than 3 months. The default calculation setting is
52 periods, but can be adjusted. This value is plotted 26 periods in the future
and forms the slower Cloud boundary.
(Purple Line Above)
(Lagging Span): Close plotted 26 days in the past
The default setting is 26 periods, but can be adjusted.