{"id":728,"date":"2019-07-03T18:18:29","date_gmt":"2019-07-03T15:18:29","guid":{"rendered":"http:\/\/roboforex.com/blog\/?p=728"},"modified":"2026-05-26T10:53:21","modified_gmt":"2026-05-26T07:53:21","slug":"how-to-use-ichimoku-kinko-hyo","status":"publish","type":"post","link":"https:\/\/roboforex.com/blog\/blog\/2019\/07\/03\/how-to-use-ichimoku-kinko-hyo\/","title":{"rendered":"How to Use Ichimoku Kinko Hyo: Ultimate Guide"},"content":{"rendered":"\n

<\/span>Principal of Ichimoku Kinko Hyo<\/a><\/span><\/h2>\n\n\n\n

Ichimoku Kinko Hyo<\/strong> is a technical analysis method devised in 1926 by Goichi Hosoda<\/strong>, better known under the pen-name Sanjin Ichimoku<\/strong>. In Japanese Ichimoku Kinko Hyo roughly means \"instant representation\" or \"one glance cloud chart\". The indicator<\/a> was designed in addition to candlestick <\/a>charts on the commodity market, and the author used it successfully for rice trading. Later it was elaborated and introduced to the public in 1968, since then being one of the traditional instruments of Japanese traders.<\/p>\n\n\n\n

Our modern world of trading <\/a>takes interest in the indicator as well, because it provides information about the direction and the potential of trends. The indicator shows the support and resistance lines<\/a> and gives signals<\/a> of market entry and exit. Ichimoku Kinko Hyo can be used on Forex<\/a>, too, especially on daily and weekly charts. It works best in combination with candlestick charts. Setting the parameters right allows using the Ichimoku on smaller timeframes<\/a>, such as H4 and H1.<\/a><\/p>\n\n\n\n

<\/span>The Ichimoku Kinko Hyo setup<\/span><\/h2>\n\n\n\n

Tenkan-sen <\/strong>shows the average price counted as the sum of the maximum and minimum price divided by 2, during a certain period (9 candlesticks by default). Tekan-sen is the quickest line of the Ichimoku chart, its incline indicating the direction of the trend. If the line goes up, the trend is ascending; if it goes down, the trend is declining.<\/p>\n\n\n\n

Kijun-sen<\/strong> is the average value between the maximum and minimum during a certain period (26 candlesticks by default).<\/p>\n\n\n\n

Senkou B <\/strong>shows the average between the maximum and minimum during a certain period, but the line is shifted forward for the value of Kijun-sen (default period is 52 candlesticks and the shift is 26 candlesticks).<\/p>\n\n\n\n

\"Ichimoku<\/a>
Ichimoku Kinko Hyo - Parameters<\/figcaption><\/figure>\n\n\n\n

Different sources give different explanations to the numbers above. One says that the number 52 used in the Senkou B parameter stands for 52 weeks, i.e. 1 year, while 26 from Kijun-sen stands for half a year. At the same time traders who has been using the instrument for a long time claim that Goichi Hosoda put a totally different meaning into the parameters. 52 means 2 standard work months (Saturday used to be a workday in Japan), 26 is the length of 1 month, and 9 is 1.5 workweeks. Today the length of a workweek is 5 days, so it might be reasonable to refresh the parameters.<\/p>\n\n\n\n

If we reduce the basic values too much, the indicator will react upon the changes on the market<\/a> too quickly, which will yield lots of opening signals<\/a> but their quality will be too poor, i.e. there will be many false signals<\/a>. If we increase the values significantly, the indicator will form the signals too slowly, which means we may miss the opportunity to enter the market at a good price. However, it is worth mentioning that the initial parameters were meant for the Japanese index Nikkei 225<\/a> for timeframes longer than the daily one. In order<\/a> to use the indicator efficiently in trading currency pairs, it should be customized in accordance with the pairs’ particularities.<\/p>\n\n\n\n

In the indicator itself only the basic parameters change, though on the chart there are much more lines. Let us discuss their meaning.<\/p>\n\n\n\n