ABOUT ICHIMOKU
Ichimoku Kinko Hyo
Ichimoku Kinkō Hyō (Ichimoku) - is a method of technical analysis that is based on candlestick charts. It was developed by Goichi Hosoda, a Japanese journalist who was known as Ichimoku Sanjin.
Ichimoku Kinkō Hyō means "one-look balance chart" and is sometimes called "cloud chart" because of the unique "clouds"(Kumo) that appear on Ichimoku charts.
Chikou span
Chikou span (Chico) price calculation: today's closing closing price displayed on the chart 26 days back. It is also used as support/resistance.
If the Chikou Span (Chico) line crosses the price from top to bottom, it is a sell signal.
If the line crosses the price from bottom to top,
it is a buy signal.
Tenkan-sen
Tenkan-Sen (TK): It is the average of the last 9 periods (highest high + lowest low)/2.
It is a turning line and a smaller support/resistance line. Tenkan Sen (red line): It is also known as the trend line. Tenkan Sen (TK) is an indicator of the market trend. If the red line moves up or down it indicates that the market is in trend. If it moves horizontally, it signals that the market is in consolidation.
Kijun-sen
Kijun-Sen (KS): It is the average of the last 26 periods (highest high + lowest low)/2.
This is the line that is most often used as support/resistance. Kijun Sen (blue line) acts as an indicator for future price movements.
If the price is above the blue line, it can continue to move up. If the price is below the blue line, it may continue to fall. If the line is horizontal it means that the market is consolidating.
Senkou span A
Senkou Span A (SSA): (Tenkan-Sen + Kijun-Sen)/2 set 26 periods ahead.
Also called leading range 1, this line forms one edge of the Kumo (cloud). If price is above the Senkou span (SSA), the top line serves as the first support level, while the bottom line serves as the second support level.
If the price is below the Senkou Span (SSA), the lower line forms the first resistance level, while the top line is the second resistance level.
Senkou span B
Senkou Span B (SSB): (highest high + lowest low)/2 calculated over the last 52 periods and set 26 periods forward.
This line, also called leading range 2, forms the second edge of the Kumo (cloud). Stronger than SSA as resistance/support.
Kumo/cloud
The Kumo (cloud) is the space between the SSA and SSB. The cloud's edges identify current and potential future support and resistance points.
The Kumo (cloud) changes its shape, height and size according to price movements. The size and height varies as larger price movements create thicker Kumo (clouds), which creates stronger support and resistance. As the thinner Kumo (clouds) offer weak support and resistance,
prices can and do tend to break through the thin clouds.
In general, markets are bullish when Senkou Span A (SSA) is trading above Senkou Span B (SSB) and vice versa when markets are bearish. Traders often look for Kumo Twists in future clouds where the SSA and SSB swap positions, a signal of a potential trend reversal.
In addition to the cloud's thickness, the strength of the cloud can also be determined by its angle; up for bulls and down for bears.
Why it's worth it?
War, Pandemic, Crisis.
How will markets behave in this time?
All of this can be calculated.
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