This indicator was invented by the Japanese analyst Hosoda, published under the pseudonym Sanzhdin Ichimoku. The indicator is included in some popular sets of software for technical analysis, but of literature on it in European languages are practically impossible. Our publication is designed to somewhat remedy this gap. Ichimoku invented the light, trying to predict the movement of the stock market index of Japan.
Formal description
Ichimoku Kinky Hajo (full name of the indicator) is designed to determine the market trend, support and resistance levels and to generate signals buying and selling. The best indicator is working on the weekly and daily charts.
When asking the dimension of parameters used four time intervals of varying length. Based on these intervals the values of individual lines composing this exotic-looking indicator.
Tenkan-sen shows the average price for the first time, defined as the sum of the maximum and minimum during this time, divided by two.
Kijun-sen shows the average price for the second time.
Senkou Span A shows the middle distance between two previous lines shifted forwards by the value of the second time interval.
Senkou Span B shows the average price for the third time interval shifted forwards by the value of the second time interval.
Chinkou Span shows the closing price of the current candle shifted backwards by the value of the second time interval.
The distance between the lines on the graph Senkou hatched with another color and called "cloud". If the price is between the lines, the market is considered to be non-trend and the edges of the clouds form when a support and rezistens.
If the price is above the cloud, then its upper line forms a support first and the second - the second a support.
If the price is under the cloud, then the lower line forms the first rezistens, at the top - the second rezistens.
If the line intersects the graph Chinkou Span prices upward, it is a signal to buy. If the top down - a signal to sell.
Kidzhun-sen (Main Line) is used as an indicator of market movement. If the price is above it, prices will likely continue to grow. When the price crosses this line is likely to further change the trend.
Alternatively, use Kidzhun-sen is the submission of signals. Signal to buy is generated when the line crosses Tenkan-Sep Kidzhun-Sep upward. From top to bottom - a sell signal.
Tenkan-sen ("reversal line") is used as an indicator of market trend. If this line increases or decreases - there is a trend. When it goes horizontally - the market went into a canal.
Informal description.
Indicator Ichimoku successfully combines a number of other indicators and a variety of approaches to forecasting price movement.
Each line represents the mid-price range for a certain period of time. So it demonstrates the border dividing the prevalence of bull or bear market forces. One can say - the consensus of the masses about the cost for a given period. The last definition coincides with the interpretation of a moving average of Elder, but the line Ichimoku constructed by another method and do not gravitate to the closing prices.
Any line Ishimoku quickly responds to the emergence of a new peak for its time range. No lag no. It is convenient to use as a trend signal. This property has a few other common indicator - Arun.
Each line represents a level of Ishimoku favorite volnovikami 50% rollback of price movement. Here is good to join the trend, the beginning of which you missed.
If you look at the line Chinkou Spahn, then we recognize his old friend - momentum. Price is compared with itself a certain time interval ago.
So, we have multi-indicator combining indicators of trend, the levels of possible kickbacks, field support and resistance and oscillator. Complex trading system that combines different approaches. Masterpiece, such that we do not know!
Dimension.
The author advises to set the values of lines (series) - 9, 26, 52, 26. It is stipulated that these dimensions - the best on the market index Nikkei - the stock market in Japan. Speculate. Shares bought a long time. In this sense, the best schedule - week. Then the dimension of the longest lines - a year. Logically, since some cycles of activity of any market is present in any speculative tool, and more than a year ahead guessing speculator is probably not worth - too easy to lose touch with reality. The dimension of the built-in momentum - 26, equal to half the base of the market cycle. Elder strongly advises and adjust the oscillator - a half-cycle and are pleased that other smart people - Ichimoku - agree with him. According to our observations, the Dow Jones goes on Ishimoku even better indicator than the native Japanese shares.
If the schedule is not a week, but, for example, five minutes, then these dimensions will be deprived, so to speak, the physical meaning and the indicator will work badly. Looking for their dimension, focused on other cycles of market activity. Thus the graphs of different time intervals need to specify different dimension indicator.
JOB.
In principle we can spend even a single line, and while price is below it to look for opportunities to sell, and if the above - to buy something. But the combination of all the lines gives a new quality - the results of such analysis is better than the summarized results of each of the lines separately.
Without going into details of our methods, we note that considering the movement after the signal Ishimoku, we got good results on many different markets and different time intervals. And the cons were limited stop-loss and were on average lower than the possible profits.
So - for five years at the Dow Jones + 26 - 10 (72% success). It is worth noting that all the hysteria of the 2000 over the coming collapse of the U.S. stock market out of hand dismissed Ichimoku - indicator did not show any catastrophe ever, but it successfully predicted many times the available local slopes.
- Over five years on Nikkei index 13 - 4 (76% success). This week graphics.
On the daily charts of exchange for 1999:
- By CHF +18 - 4
- Of EUR +16 - 7
- By JPY + 16 - 4
- For GBP + 12 - 9.
On the hourly charts for the quarter
- By CHF + 45 - 10
- At AUD + 39 - 15
- By JPY + 48 - 16
At the five-minute chart for 6 days in the period from 5 to 17 hours of Greenwich (this is not serious, but interesting):
- By CFH + 7 - 3
- By EUR + 7 - 2
- By JPY + 6 - 1
- For GBP + 3 - 1
Previously, we believed that the five-minute work schedules may try only romantic dreamers, but the application to him indicator Ichimoku strongly shake our conviction.
Nevertheless, when we started to develop his trading system based on Ichimoku, then took over on hourly chart.
We hope that we can acquaint you with our trading system, giving advice in real time, and yet present the results of work on the euro and British pound.
INDICATOR
EUR
GBP
Testing time, months
8
8
Number of transactions
111
119
Winnings
59
80
Lost
34
32
Other deals were closed at par.
Score points
+ 2610
+ 2794
Lost items
- 1133
- 1204
The totals in paragraphs
+ 1477
+ 1590
The greatest incremental loss
- 150
- 164
Profit Factor
2.30
2.33
Factor recovery (how many times you can play the maximum incremental loss)
9.8
9.7
Average profit items
185
199
In Swiss franc results even better, according to the Japanese yen, slightly worse, but still positive.
