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Ichimoku, or rather “Ichimoku Kinko Hyo” is a trend trading charting system originating from Japan, one that is not tied to a specific market. Its main strength is that by using multiple data points it gives a trader a deeper insight into price action. This (rather visual) insight enables the trader to quickly filter and find high probability trades.

An Ichimoku chart allows the trader to see at a glance whether price action is in equilibrium or not. In fact, one common translation for “Ichimoku Kinko Hyo” is “equilibrium chart at a glance”:

Ichimoku Chart

An Ichimoku chart uses 5 separate indicator lines:

  • Turning Line (”Tenkan Sen”)
  • Standad Line (”Kijun Sen”)
  • Lagging Line (”Chikou Span”)
  • First Leading Line (”Senkou Span A”)
  • Second Leading Line (”Senkou Span B”)

These indicator lines are not evaluated in isolation, they are rather used to get an integrated ‘big picture’ that shows the trader whether current price action is in equilibrium or not. In that sense, even if designed to be a trend trading system, an Ichimoku chart can also be used to signal possible trend reversals.

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