6) Horizontal shift; in Ichimoku Charts:
The Ichimoku Kinko Hyo – hereon called simply Ichimoku – indicator/system manipulates moving average to give us visual cues of support and resistance as well as generate trading signals. However, instead of using the moving average of the closing price, it uses the MA of something different. Refer to the calculation below copied over from the FXTimes glossary.
The Ichimoku chart consists of five lines constructed using only the midpoints of previous highs and lows. The five lines are calculated as follows:
1) Tenkan-Sen = Conversion Line = (Highest High + Lowest Low) / 2, for the past 9 periods
2) Kijun-Sen = Base Line = (Highest High + Lowest Low) / 2, for the past 26 periods
3) Chikou Span = Lagging Span = Today’s closing price plotted 26 periods behind
4) Senkou Span A = Leading Span A = (Tenkan-Sen + Kijun-Sen) / 2, plotted 26 periods ahead
5) Senkou Span B = Leading Span B = (Highest High + Lowest Low) / 2, for the past 52 periods, plotted 26 periods ahead
Kumo = Cloud = area between Senkou Span A and B
Here is an example of what the Ichimoku Kinko Hyo
In construction of other indicators:
Fan Yang CMT is the Chief Technical Strategist FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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