Review of Ichimoku:
The importance of Ichimoku Analysis is increasing day by day. It is a well -known form of technical analysis in the west. This analysis was introduced in 1960 by Goichi Hosoda. It is primarily based on the Japanese Candlestick. It allows traders to understand the current state of the Forex market. This analysis is a popular indicator of support and resistance points. Even if it looks very complicated on the charts but it is easy to understand. This is the greatest force in Ichimoku analysis. You just have to devote any time to master it. It will then allow you to easily identify future market changes. Obviously you will know the future prices of currencies. This allows traders to have a long-term view of the market.
Ichimoku Testing Components:
You can find five indicators in the overlays on the Ichimoku Chart. These are:
This is usually a Turn line. The median value of the last nine periods is used to calculate it. The median value is the average between the highest point and lowest point in the last 9 periods. The mid-range average value does not operate average. There is a fundamental difference between them. It doesn’t look as smooth as a moving average.
Base line is pointed as Kijun-sen. The median value of the past 26 seasons is included in Kijun-sen. You use it to calculate Kijun-sen.
Senkou Span A:
This is the Major or Leading Span A. You can calculate this by taking the average value of the aforementioned long Turning line and Base line (Tenkan-sen and Kijun-sen).
Senkou Span B:
This is actually Leading or Cloud Span B. You need to consider the median amount over the last 52 days and plot the amount as the 26 day initial amount.
Chikou Span: The Chikou Span is the Lagging Line. This is the final amount of money 26 days back. You have to keep in mind that Chikou Span does not take into account the median value.
This is the most important part of the Ichimoku chart. This is the area between both Span A and Span B. If the price touches this Fist, you will find trading opportunities. This is the most important factor in Ichimoku Analysis for entering or exiting a trade.
Like all other analysis charts, this Ichimoku analysis also has weaknesses. This is not good to do on different days in the Forex market.