How to trade using Ichimoku Kinko Hyo

How to viewIchimoku Kinko Hyo

Ichimoku Kinko Hyo is composed of four main elements the Tenkan-Sen Conversion Line, the Kijun-Sen Base line, the Chikou Span Lagging Span, Kumo Cloud (the distance between two Senkou Span – Leading Span) and it predicts the change of trend or signals trading buy and sell.

How to view Ichimoku Kinko Hyo

  • Base line
  • It is the mean value of the high and low of the market price in the past 26 sessions.

    The baseline determines the direction of the market price going up or down.

  • Conversion line
  • It is the mean value of the high and low of the market prices for past 9 sessions.

    Signaling a transaction buy and sell in the direction that the exchange rate has crossed the conversion line.

  • Cloud
  • This is the central area of price volatility, which is the area between Senkou Span 1 (Leading Span 1) and Senkou Span 2 (Leading Span 2).

    The cloud is used as a Resistance line.

  • Laggin span
  • The line shows the current 26-day exchange rate.

    Signalling buy and sell when the standard level of the lagging span exceeds the actual price.

How to trade using Ichimoku Kinko Hyo

Below is a sample trading

When the price is above the conversion line, place a buy order and the profit margin will be identified when it touches the cloud.

You can confirm that if the baseline seems to move upward, the transition line will be above the base line and that means the market price tends to be bullish.

Then you can trade by placing a buy order at a price above the cloud.

How to trade using Ichimoku Kinko Hyo

You can use Ichimoku Kinko Hyo right in each time frame, but display a one-day time frame is commonly referred to.

Racap on how to make a profit with Ichimoku Kinko Hyo

  • The baseline will determine whether the market price is moving up or down
  • Predict whether to buy if the exchange rate is above the conversion line or to sell if the exchange rate falls below the conversion line
  • Cloud is seen as Resistance line
  • Predict to buy if the laggin span rises above the actual price or sell if the laggin span falls below the actual price
  • Predict to buy and sell from the baseline, the conversion is the Golden Cross, Dead Cross