Ichimoku Kinko Hyo - Indicator for MetaTrader 4
The Ichimoku Kinko Hyo indicator has been predefined to characterize the market trend, support and resistance levels, and to generate buying and selling signals. This indicator works best in weekly and daily charts.
By defining the dimension of the parameters, four time intervals of different lengths are used. The values of the individual lines that compose this indicator are based on these intervals:
Tenkan-sen Displays the average price value during the first time interval defined as the sum of the maximum and minimum within this time, divided by two;
Kijun-sen Displays the average price value during the second time interval;
Senkou Span A shows half the distance between two previous lines moved forward by the value of the second period of time;
Senkou Span B Displays the average price value during the third time interval offset forward by the value of the second period of time.
Chikou Span Displays the closing price of the current sail displaced backwards by the value of the second period of time. The distance between the Senkou lines is streaked in another color and is called "cloud". If the price is between these lines, the market should be regarded as non-trend, and then the margins of the cloud form the levels of support and resistance.
If the price is above the cloud, its top line forms the first level of support, and the second line of the second level of support;
If the price is below the cloud, the lower line forms the first level of resistance, and a higher the second level;
If the Chikou Span line runs the price chart in the bottom-up direction it is a sign of purchase. If the Chikou Span line runs the price chart in the top-down direction is the sales signal.
Kijun-Sen is used as an indicator of market movement. If the price is higher than this indicator, prices will probably continue to increase. When the price goes through this line the change in future trend is possible.
Another type of use Kijun-sen is to give signals. The purchase signal is generated when the Tenkan-sen line crosses the Kijun-sen in the bottom-up direction. The top-down direction is the signal to sell.
Tenkan-Sen is used as a market trend indicator. If this line increases or decreases, there is a trend. When it goes horizontal, it means the market has entered the channel.
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