Yes, you're still in the right place. You're still in the School of
Pipsology and not in some Japanese pop fan girl site (although Huck may
disagree with the rest of the FX-Men on that). No, "Ichimoku Kinko Hyo"
ain't Japanese for "May the pips be with you," but it can help you grab
those pips nonetheless.
Ichimoku Kinko Hyo (IKH) is an indicator that gauges future price
momentum and determines future areas of support and resistance. Now
that's 3-in-1 for y'all! Also know that this indicator is mainly used on
JPY pairs.
To add to your Japanese vocab, the word ichimoku translates to "a glance", kinko means "equilibrium", while hyo is Japanese for "chart." Putting that all together, the phrase ichimoku kinko hyo stands for "a glance at a chart in equilibrium." Huh, what does all that mean?
make things easier to explain...
Whoops. That didn't help. A few more lines and this'll resemble a seismograph.
Before you go off and call this gibberish, let's try to find out what each of the lines is for.
Kijun Sen (blue line): Also called standard line or
base line, this is calculated by averaging the highest high and the
lowest low for the past 26 periods.
Tenkan Sen (red line): This is also known as the
turning line and is derived by averaging the highest high and the lowest
low for the past nine periods.
Chikou Span (green line): This is called the lagging line. It is today's closing price plotted 26 periods behind.
Senkou Span (orange lines): The first Senkou line is
calculated by averaging the Tenkan Sen and the Kijun Sen and plotted 26
periods ahead. The second Senkou line is determined by averaging the
highest high and the lowest low for the past 52 periods and plotted 26
periods ahead.
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