toukika, your japanese is way ahead of mine Need to find dictionary to look up
wo tsukatte and iu koto ga for starters…
Anyway Japanese fluency is not necessary to understand Ichimoku, although you will probably pick up a few words!
Well, I shall begin with a brief into to Ichimoku Kinko Hyo … it is actually meant to be a simple & quickly understood chart:
“[I]Ichimoku Kinko Hyo is a purpose-built trend trading charting system that has been successfully used in nearly every tradeable market. It is unique in many ways, but its primary strength is its use of multiple data points to give the trader a deeper, more comprehensive view into price action. This deeper view, and the fact that Ichimoku is a very visual system, enables the trader to quickly discern and filter “at a glance” the low-probability trading setups from those of higher probability. [/I]”
What attracted me to it is the fact that it is somewhat predictive and very few indicators are predictive … most are lagging. The IKH projects [I]forward [/I]in time to future probabilities.
OK … there are 5 components:
TENKAN SEN (“turning line”)
(HIGHEST HIGH + LOWEST LOW)/2 for the past 9 periods
KIJUN SEN (“standard line”)
(HIGHEST HIGH + LOWEST LOW)/2 for the past 26 periods
CHIKOU SPAN (“lagging line”)
CURRENT CLOSING PRICE time-shifted backwards (into the past) 26 periods
SENKOU SPAN A (“1st leading line”)
(TENKAN SEN + KIJUN SEN)/2 time-shifted forwards (into the future) 26 periods
SENKOU SPAN B (“2nd leading line”)
(HIGHEST HIGH + LOWEST LOW)/2 for the past 52 periods time-shifted forwards (into the future) 26 periods
The latter two delineate the top & bottomside of the infamous “kumo” or clouds that appear on the chart.
For starters, add the ichimoku indicator to a daily chart. The indicator is built into MT4 (I thought it had to be installed as a custom, but it is right there under oscillators).
Now what I did was adjust the colors … I made the lines thicker and changed the colors to more vibrant ones so I could easily distinguish the lines.
That is the first task … add the indicator (make it the ONLY indicator on your chart) and adjust the colors to suit.
Next we’ll get into what it all means… if anyone is already good at reading these charts, feel free to jump in!