Ichimoku Indicator is used to gauge momentum along with future areas of support and resistance. The Ichimoku indicator is comprised of five lines called the tenkan-sen, kijun-sen, senkou span A, senkou span B and chickou span. This indicator was developed so that a trader can gauge an asset’s trend, momentum and support and resistance points without the need of any other technical indicator.
Ichimoku indicator for metatrader
Ichimoku Indicator is predefined to characterize the market Trend, Support and Resistance Levels, and to generate signals of buying and selling. Ichimoku indicator works best at weekly and daily charts.
This indicator works best at weekly and daily charts.When defining the dimension of parameters, four time intervals of different length are used. The values of individual lines composing this indicator are based on these intervals:
•Tenkan-sen shows the average price value during the first time interval defined as the sum of maximum and minimum within this time, divided by two;
•Kijun-sen shows the average price value during the second time interval;
•Senkou Span A shows the middle of the distance between two previous lines shifted forwards by the value of the second time interval;
•Senkou Span B shows the average price value during the third time interval shifted forwards by the value of the second time interval.
•Chinkou Span shows the closing price of the current candle shifted backwards by the value of the second time interval.
The distance between the Senkou lines is hatched with another color and called “cloud”. If the price is between these lines, the market should be considered as non-trend, and then the cloud margins form the support and resistance levels:
•If the price is above the cloud, its upper line forms the first support level, and the second line forms the second support level;
•If the price is below cloud, the lower line forms the first resistance level, and the upper one forms the second level;
•If the Chinkou Span line traverses the price chart in the bottom-up direction it is signal to buy. If the Chinkou Span line traverses the price chart in the top-down direction it is signal to sell.
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