The Ichimoku Kinko Hyo which is sometimes called Ichimoku is a technical analysis method that builds on candlestick charting thus improving on the accuracy of forecast price moves. The method was developed in the 1930s by Goichi Hosoda, a Japanese journalist. He worked on the method for about 30 years and released his findings to the general public in the late 1960s.
The Elements of the Ichimoku Kinko Hyo
1. Kijun Sen(Blue Line)- This is the standard line/ base line which is obtained as the average of the highest high and lowest low of the past 26 periods
2. Tenkan Sen(Orange Line) - Also known as the turning line and its an average of the highest high and lowest low of the past nine periods
3. Chikou Span(Purple line) - This is the lagging line and it’s the current closing price plotted 26 period behind.
4. Senkou Span- It comprise of two lines; the first senkou line(A) which is the average of the tenkan sen and the kijun sen which is plotted 26 periods ahead and the second senkou line(B) which is the average of the highest high and lowest low for the past 52 periods and plotted 26 periods ahead. Enclosed between the senkou A and B is cloud.