Ichimoku is a technical analysis method that builds on candlestick charting to improve the accuracy of forecast price moves.[1] 

Ichimoku Kinko Hyo translates to one glance equilibrium chart or instant look at the balance chart and is sometimes referred to as “one glance cloud chart” based on the unique “clouds” that feature in ichimoku charting.

Ichimoku is a moving average-based trend identification system and because it contains more data points than standard candlestick charts, it provides a clearer picture of potential price action. The main difference between how moving averages are plotted in ichimoku as opposed to other methods is that ichimoku’s lines are constructed using the 50% point of the highs and lows as opposed to the candle’s closing price.

Ichimoku factors in time as an additional element along with the price action, similar to William Delbert Gann‘s trading ideas.Let look at EUR/JPY: Ichimoku clouds Analysis .

Let’s look at the four-hour chart. Tenkan-sen line is below Kijun-sen, the lines are horizontal . Confirmative line Chikou Span is below the price chart, current cloud is descending. The instrument is trading below Tenkan-sen and Kijun-sen lines; the Bearish trend is still strong. One of the previous minimums of Chikou Span line is expected to be a support level (118.30). The closest resistance level is Tenkan-sen line (118.85).

On the daily chart Tenkan-sen line is below Kijun-sen, the lines are horizontal . Confirmative line Chikou Span is below the price chart, current cloud has reversed from ascending to descending. The instrument has broken down the cloud and is still falling. One of the previous minimums of Chikou Span line is expected to be a support level (116.60). The closest resistance level is the upper border of the cloud (118.85).

Recommendation

On the four-hour chart the instrument is still falling. On the daily chart the instrument has broken down the cloud, forming a strong signal to sell. It is recommended to open short positions at current price with the target at the level of previous minimum of Chikou Span line (116.60) and Stop Loss at the lower border of the cloud (118.85).

Scenario

Timeframe Weekly
Recommendation SELL
Entry Point 118.55
Take Profit 116.60
Stop Loss 118.85
Key Levels 118.30, 118.85
Follow us or share
Share

Leave a Reply

Your email address will not be published.

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>