Ichimoku Kinko Hyo
The Ichimoku Kinko Hyo, or Ichimoku for short, is a technical indicator that is used to gauge momentum along with future areas of support and resistance. all-in-one technical indicator is comprised of five lines called the tenkan-sen, kijun-sen, senkou span A, senkou span B and chikou span.  TradingView. The Ichimoku Kinko Hyo indicator was originally developed by a Japanese newspaper writer to combine various technical strategies into a single indicator that could be easily implemented and interpreted. There are five key components to the Ichimoku indicator: **Tenkan-sen:** The tenkan-sen, or conversion line, is calculated by adding the highest high and the highest low over the past nine periods and then dividing the result by two. **Senkou Span B:** The senkou span B, or leading span B, is calculated by adding the highest high and the lowest low over the past 52 periods, dividing it by two, and then plotting the result 26 periods ahead. **Senkou Span A:** The senkou span A, or leading span A, is calculated by adding the tenkan-sen and the kijun-sen, dividing the result by two, and then plotting the result 26 periods ahead.
What is the Ichimoku Kinko Hyo
The Ichimoku Kinko Hyo, or Ichimoku for short, is a technical indicator that is used to gauge momentum along with future areas of support and resistance. The all-in-one technical indicator is comprised of five lines called the tenkan-sen, kijun-sen, senkou span A, senkou span B and chikou span.
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Understanding Ichimoku Kinko Hyo
The Ichimoku Kinko Hyo indicator was originally developed by a Japanese newspaper writer to combine various technical strategies into a single indicator that could be easily implemented and interpreted. In Japanese, "ichimoku" translates to "one look," meaning traders only have to take one look at the chart to determine momentum, support, and resistance.
Ichimoku may look very complicated to novice traders that haven't seen it before, but the complexity quickly disappears with an understanding of what the various lines mean and why they are used.
The Ichimoku indicator is best used in conjunction with other forms of technical analysis despite its goal of being an all-in-one indicator.
Ichimoku Kinko Hyo Interpretation
There are five key components to the Ichimoku indicator:
Example of an Ichimoku Kinko Hyo Chart
The following is an example of an Ichimoku indicator plotted on a chart:
Image by Sabrina Jiang © Investopedia 2021
In this example, the Ichimoku cloud is the area that's shaded green, which represents a key area of support and resistance. The chart shows that the SPDR S&P 500 ETF remains in a bullish uptrend since the current price is trading above the cloud. If the price were to enter the cloud, traders would watch for a potential reversal of the trend.
Related terms:
Chikou Span (Lagging Span)
The Chikou span is a component of the Ichimoku Kinko Hyo indicator that is created by plotting closing prices 26 periods in the past. read more
Ichimoku Cloud : Formula & Calculation
The Ichimoku Cloud is a technical analysis indicator, which includes multiple lines, that help define the support, resistance, momentum, and trend direction of an asset. read more
Kijun-Sen (Base Line) and Uses
The Kijun-sen, or base line, is one of the components of the Ichimoku Kinko Hyo indicator or Ichimoku cloud. It provides trade signals when combined with the other components. read more
Momentum
Momentum is the rate of acceleration of a security's price or volume. Momentum generally refers to the speed of movement and is usually defined as a rate. read more
Resistance (Resistance Level) & Example
Resistance refers to a level that the price action of an asset has difficulty rising above over a specific period of time. read more
Reversal and Trading Uses
A reversal occurs when a security's price trend changes direction, and is used by technical traders to confirm patterns. read more
Senkou Span A (Leading Span A)
Senkou Span A is one of five components of the Ichimoku Cloud indicator that forms the "cloud" and can be used to indicate support and resistance areas. read more
Senkou (Leading) Span B and Uses
Senkou Span B is one of five components of the Ichimoku Cloud indicator. Leading Spans B and A form the “cloud,” which can be used to indicate support and resistance areas. read more
Stop-Loss Order
Stop-loss orders specify that a security is to be bought or sold when it reaches a predetermined price known as the spot price. read more
Support (Support Level) & Example
Support refers to a level that the price action of an asset has difficulty falling below over a specific period of time. read more