Ichimoku Kinko Hyo Technical Indicator
Ichimoku Kinko Hyo is a Japanese charting technique that was created before by a Japanese newspaper writer, with the pen name of Ichimoku Sanjin.
- Ichimoku means 'a glance' or 'one look'
- Kinko means 'equilibrium' or 'balance'
- Hyo is the Japanese word for "chart"
Thus, Ichimoku Kinko Hyo means, 'a glance at an equilibrium chart'. Ichimoku attempts to identify the likely direction of xagusd price and help the trader to figure out the most suitable time to enter or exit the xagusd trading market.
Calculation
This silver technical indicator consists of five lines drawn using the midpoints of previous highs and lows. Five lines are calculated as follows:
1) Tenkan-Sen: Conversion Line: Red Line (Highest High + Lowest Low) / 2, for the last 9 xagusd price periods
2) Kijun-Sen: Base Line: Blue Line (Highest High + the Lowest Low) / 2, for last 26 xagusd price periods
3) Chikou Span: Lagging Span: Green Line Today's closing xagusd price drawn 26 xagusd price periods behind
4) The Senkou Span A: Leading Span A = (Tenkan Sen + Kijun Sen) / 2, drawn 26 xagusd price periods ahead
5) The Senkou Span B: Leading Span B: (Highest High + the Lowest Low) / 2, for the past 52 xagusd price periods, drawn 26 xagusd price periods ahead
Kumo: Cloud: area between the Senkou Span A & B
XAGUSD Trading Analysis & Generating Trading Signals
Bullish signal - Tenkan-Sen crosses Kijun-Sen from below.
Bearish signal - Tenkan-Sen crosses the Kijun-Sen from above.
However, there are different areas of strength for the buy & sell xagusd trade signals generated.
Technical Analysis in XAGUSD Trading
Bullish cross-over signal occurs above the Kumo (clouds),
Very strong buy xagusd trading signal.
Bearish crossover signal forms below the Kumo (clouds),
Very strong sell xagusd trading signal.
If a bullish/ bearish cross-over signal takes place within the Kumo (clouds) it is considered a medium strength buy or sell xagusd trading signal.
A bullish crossover that occurs below the clouds is considered a weak buy silver signal while a bearish crossover that occurs above the clouds is considered a weak sell xagusd trading signal.
Support & Resistance Levels
Support & resistance levels can be predicted by the presence of Kumo (clouds). The Kumo can also be used to identify the current silver trend of the xagusd trading market.
- If xagusd price is above the Kumo, the prevailing market silver trend is said to be upwards.
- If xagusd price is below the Kumo, the prevailing market silver trend is said to be downwards.
Chikou Span or Lagging Span is also used to determine the strength of the buy or sell xagusd trading signal.
- If the Chikou Span is below the closing xagusd price of the last 26 periods ago and a sell short signal is given, then the strength of the silver trend is downwards, otherwise the signal is considered to be a weak sell xagusd trading signal.
- If there is a bullish signal and the Chikou Span is above the xagusd price of the last 26 periods ago, then the strength of the silver trend is to the upside, otherwise it is considered to be a weak buy xagusd trading signal.
