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Posted on Jan 19, 2022 at 12:02 AM
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Get Started With Ichimoku!

Ever been in a conversation with your Forex Trader friend, only to hear them pop the word - 'Ichimoku'? The first time I heard it; Omoorr... I think say na Igbo word o! How wrong I was.

I-C-H-I-M-O-K-U.

You sef reason am na! E no resemble Igbo for your ear?

If you're still a 'baby Forex Trader' (with a feeding bottle), I can bet my diapers that you're chuckling right now. wink

Well, I hate to burst your bubble and crash your expectations: Ichimoku is not a Spare-Parts Vendor from the East; he is not an Importer-Exporter in Alaba International Market either.

Lol, he is not even from Africa, save Nigeria.

Ichimoku Kinko Hyo: 'It' is from Japan!

Yeah, no mistake!

The Ichimoku is not a person, but a helpful Forex Indicator for trading stocks, commodities and futures (dude, I got you laughing).

Ichimoku Kinko Hyo means “Equilibrium Chart at a Glance" in the Japanese language, and it was created by a Journalist in Japan named Goichi Hosada in the mid-20th century.

Goichi_Hosada
Goichi Hosada

Ichimoku Only Became Popular In The Past Decade

Until 1968, the indicator was only used in Japan and Asia, and was not known to you and me. It took several years of testing by Mr Hosada and his students to finally release Ichimoku to the public.

Even after it was released to the public? It was still not popular on a global scale and its fame remained in Asia.

...Until the last decade and BOOM! It exploded in fame (like ZaZu Zeh laughing) after everyone started to notice the success recorded by its users.

It moved from being just a mere Forex indicator to an important tool for trading futures, stocks, and commodities.
 

How The Ichimoku Works 

Like I mentioned earlier, Ichimoku Kinko Hyo means “Equilibrium Chart at a Glance”. 

So the next question you want to ask me is: "how does this even work?"

It's pretty simple: To create a '3D movie' of how the market is trending, the Ichimoku uses a series of FIVE (5) DISCRETE COMPONENTS.

Mind you, each of these components is not meant to be used individually, but to be considered as part of a system (in this case, the view of the market and the instrument being analyzed).

The best time intervals to use the Ichimoku are the daily and weekly intervals.

The 5 Components of Ichimoku 

Are you ready to learn some Japanese words? Follow me as I unravel the 5 Components of the Ichimoku! 

1. Tenkan Sen – This can be translated in English as ‘the turning line’, and is defined as the sum of the highest high and lowest low divided by 2 for the last number of time periods being analyzed.

2. Kijun Sen – This can be translated in English as ‘the standard line’, and is defined as the sum of the highest high and lowest low divided by 2 for a second, longer time interval.

3. Chikou Span – This can be translated in English as the ‘lagging line’, this is the value of the closing price over the same time period as the Kijun Sen.

4. Senkou Span A – This can be translated in English as the ‘first leading line’, and is the sum of the Tenkan Sen and Kijun Sen divided by 2, considering a longer interval into the future.

5. Senkou Span B – This can be translated in English as the ‘second-leading line’, and is the sum of the highest high and lowest low, divided by two for a time span that is double the Kijun Sen, into the future.

Shey I no go begin arrange Japanese tutorials laidis? cool

Some Parting Words... 

Confused? Don't worry, you'll catch up with time.

A lot, if not all traders get confused on their first encounter with the Ichimoku, but with a little bit of patience, you will become a guru ceaselessly rocking this helpful Forex indicator.

Here's a little hack for you:

If the price of a particular pair exceeds the Kijun Sen, the pair is most likely to continue rising.

On the other hand, commodities whose prices cross the Kijun Sen will experience a trend shift in the opposite direction.

Do you know that ardent followers of Ichimoku Kinko Hyo believe that signals can be generated from the Kijun Sen?

How? A buy signal would occur when the Tenkan Sen crosses the Kijun Sen in the bottom-up direction, while a sell signal will be generated when the signals cross in the top-down direction.

This is the first time ever series of the Ichimoku, and you can bet that another series is coming! If you're still a baby Forex trader still learning the ropes, then you want to pay close attention to your Forex Trading Psychology.

Click Here to read our article on the 5 Famous Truths on Forex Trading Psychology as highlighted by Mark Douglas.


Dear Reader,

If you're are new, I'll like to warmly welcome you to our amazing community of successful Nigerian Forex Traders.

What we do is make your life pretty easy by equipping you with all the support you need as a baby Forex trader to trade the Forex Markets profitably. Why Not Click Here to Say Hi?

If on the other hand, you're an existing trader or Forex Trading 'Chi Fu' that literally eats, drinks and breathes charts: With all due respect and utmost regards to your personality, you're welcome, boss!

May I have the utmost pleasure of inviting you to our Amazing Community of Nigerian Forex Traders?


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