INDICATOR Ichimoku

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.

Ichimoku Kinko Hyo (Ichimoku Kinky Hajo)

Indicator Ichimoku (Ichimoku) was originally developed in Japan to work in conjunction with Candlestick analysis, since the lack of Candlestick analysis at independent use, was the impossibility of a qualitatively and accurately determine the levels of entry and exit from the market, as well as stops and limits.

Ichimoku designed analyst named Goichi Hosoda (Goichi Hosoda) (a pseudonym in the literature Ichimoku Sanzhdin (Ichimoku Sanjin)) for the Nikkei index. Ichimoku considered trend indicator (although there are elements within it kontrtrendovogo analysis): it gives good signals in the trend and normal (at the level of common oscillator signals ranged).

Formula:

Graphically display consists of 3 separate lines and two lines between which the hatched area price chart

Tenkan Saint

Tenkan-sen = (Max (High, N) + Min (Low, N)) / 2,

where Max (High, N) - the highest of the highs for a period equal to N - intervals (eg, N days)

Min (Low, N), - the lowest low for a period equal to N - interval

N - length of the period

Kindzhun Saint

Kijun-sen = (Max (High, M) + Min (Low, M)) / 2

M - length of the period

Chinkou Spen

Chinkou Span = Current Close,

shifted back to M

Shaded area (cloud) between

Senko Spen "A"

Senkou Span A = (Tenkan-sen + Kijun-sen), shifted forward on the intervals M

Senko Spen "B"

Senkou Span B = (Max (High, Z) + Min (Low, Z)) / 2, shifted forward on the intervals M

Z - the length of the interval

Number of intervals - N, M, Z specified by the author for the calculations are respectively 9.26 and 52. These figures are taken from the following relations:

On the daily chart:

9 - and a half working weeks, 26 - the number of working days per month (in Japan was 6 days a week), and 52 - the number of weeks per year. On the weekly chart:

9 weeks, approximately 2 months, 26 weeks make up half of the year, 52 weeks - a year.

Description:

Indicator Ichimoku Kinky Hajo (Ichimoku Kinko Hyo) consists of 5 lines:

Tenkan-Sen (Tenkan-sen-reversal line) - short-term trend line, showing a "fast" trend. Tenkan-Sen points to the current direction of short-term trends, as the average of the maximum and minimum prices over a long period of time. Accordingly, if it is directed upwards, it means the presence in the market uptrend, if it moves down, then downward. If, however Tenkan Saint parallel to the axis of time, then most likely, the market is now in a position to Fleta.

Kindzhun-Sen (Kijun-sen - the main line) - long-term trend line (usually considered to 26 periods). Show more long-term trend, its direction. Interpretation is the same as the short line.

Senkou-Spen "A", (Senkou Span A - ahead of the line) As a whole, shows the middle of the distance between the lines Tenkan-Sen-Sen and Kindzhun shifted forwards by the value of the second time interval. Senkou-Spen "A" is the upper limit of the clouds, is it - the line of future support and resistance market.

Senkou-Spen "B" (Senkou Span B - ahead of the line) is calculated as the average maximum and minimum prices for the third longer time interval shifted forwards by the value of the second time interval Senkou-Spen "B" is a cloud Ichimoku is also considered line of future support and resistance market.

The distance between Senkou-Spen "A", Senkou-Spen "B" usually hatched, forming a kind of "cloud Ichimoku.

Chico Spen (Chinkou Span - retarded line) - is a line graph closing prices pushed usually by 26 periods (ie the second time interval).

Use

1. The most significant signals Ishimoku include crossing rates and line Senkou-Spen "B". If the price crosses Senkou-Spen "B" from top to bottom, the signal is on sale, if the bottom up, then the purchase. This signal is amplified, if prices go beyond the cloud Senkou-Spen. The system is similar to the classic strategy of suppressing the price of its moving average.

2. Signals during fletovogo market conditions arise when prices are within a cloud Ichimoku. When crossing the short line Tenkan Saint upward long line Kindzhun-Sep signal is to buy. The intersection of short line Tenkan-Sen down the long line Kindzhun-Sen is a signal to sell.

This type of signal is weak, if prices are in the cloud. Sign up can be carried out if the prices are at the lower boundary of the clouds, and down if they are at the upper boundary of the clouds. It is assumed that the cloud must be sufficiently broad.

The system is similar to the classic strategy of intersection of two moving averages.

3. When you trade within the trading range is that if prices remain in the cloud and Tenkan-Sep directed upwards, then there is a movement to the top of the range, if you down to the bottom, and if it moves parallel to the axis of time, the prices are on the spot. Therefore, the strategy can be built on a turn Tenkan-sen. When you purchase a turn upward, with a turn downward sales if prices are inside the cloud.

4. When the short and medium trendline (Tenkan-Sen and Kindzhun-Sen) will be parallel to each other and parallel to the line Senkou-Spen "B" means the development of the market for sustainable trend. It is believed that the correction of prices and rollback to one of these lines can be added to a position or restore the position of the trend. In an uptrend is necessary that the top was Tenkan-Seine in the middle of Kidzhun-Sen and bottom Senkou Spen-B, and vice versa, in descending from the top Senkou Spen-B in the middle of Kidzhun-Sen with bottom Tenkan-Sept.

5. When the price is inside the clouds, if Chinkou-Spen crosses the price upwards, it gives a signal to buy. If Chinkou-Spen price crosses from above - down, then gives a signal to sell. The author recommended method to set foot in the opposite boundary of the cloud. If you make purchases, then under the lower limit, respectively, for the sale over the upper limit. The purpose of trade is the level inside the cloud, separated from the boundary by about 10-20% at this level exhibited a warrant to take profits. In addition, the position is closed and in the case of receiving any return signal (if you unfold Tenkan-Sen, if the price chart crosses Chico Spen in the opposite direction or the intersection of costs Senkou-Spen "A" or "B").

6. Senkou-Spen "A" and Senkou-Spen "B" form, respectively, resistance and support to the market, which is inside the cloud. When the market is below the clouds, then Senkou-Spen "B" (lower bound) forms the first resistance, and Senkou-Spen "A" (top line) - the second resistance.

When the price is above the clouds, the first support is Senkou-Spen "A" and the second - Senkou-Spen "B"

7. Stand-alone signals a trend Tenkan-Seine, if it is directed upwards, it is aptrend, if down, dauntrned. If parallel, the Flete. Therefore, the ability to make some cases, you can enter and exit the market after a change of direction Tenkan-Sen.

8. Line Senkou-Spen "B" is used to set the stop orders.

Note:

1. In all cases, the intersection is the intersection line of the indicator and the line's closing price.

2. As the variables are sometimes applied reduced by half, ie 5, 13, 26.

The forums there are recommendations on the following parameters:

For schedules of 15 minutes to an hour 15, 60, 120.

For schedules of hours before the day of 12, 24, 120.

for daily charts 9, 26, 52.

3. It is believed that the best works on the charts with a timeframe longer than a day.

4. Quite often the use of entry and exit signals combine with other (not related to Ishimoku) techniques exhibiting stops and limits (support and resistance, Fibo borderline trend channels, etc.).

Pluses:

Allows you with some accuracy to separate the trend from Fleta. And, as many believe is likely to bite off part of a trend.

Lines Ichimoku instantly react to new extremes, and accordingly, do not lag behind as the slide.

Disadvantages:

It is believed that the indicator does not work here Flat, especially if Flete "narrow".