Ichimoku Indicator - also called Ichimoku Kinko Hyo - is a tool for technical analysis developed by Goichi HOSODA in Japan at the end of 1930s. It became popular with investors and traders worldwide as it provides a holistic picture of price and market movements. The Ichimoku Indicator is a technical analysis tool that was developed in Japan by Goichi Hosoda during the late 1930s. It has become popular among traders and investors worldwide due to its ability to provide an holistic view of price action and market trends.
Tenkan-sen (Conversion Line)
Tenkan-sen also known as Conversion Line is a component in Ichimoku Indicators. This line represents the midpoint of highest highs to lowest lows on a prolonged period - usually nine periods). It acts as a dynamic resistance/support line that can provide short term price momentum as well as potential trends reversals.
Kijun-sen (Base Line)
Kijun-sen - or Base Line - is one part of Ichimoku Indicator. Tenkansen is a calculation of longer time periods, typically 26. Kijun sen can provide more reliable levels of medium-term support or resistance, and help detect any potential trend continuation.
Senkou-Span A & B (Leading Spacings of Ichimoku Indicator)
These lines make up the Leading Span of Ichimoku Indicator. By projecting forward values from Tenkansen to Kijunsen 26 periods ahead they create what is called Kumo. Senkou Span B is calculated using 52-period data, while Senkou Span B involves averaging Tenkan sen and Kijun sen values over 26-periods. These lines are part of the Leading Span component in Ichimoku Indicator. They project forward from Tenkan sen to Kijun sen by 26-periods.
Chikou Span / Lagging Span
The Chikou Span / Lagging Span is the final component in Ichimoku Indicator. Representing closing prices 26 periods earlier on a bar chart, it allows traders to compare the current price with historic levels. It also confirms and validates other signals generated from this indicator.
Ichimoku Indicator allows traders to create trading signals, analyze price trends, and recognize patterns. Understanding the relationships between its components can help traders make better decisions by gaining greater insights.