Meaning:Meaning:Meaning:Meaning:

Ichimoku means: one glance, Kinko means: gequilibrium (or balance), and Hyo means: chart. The term Ichimoku Kinko Hyo ycould be translated as: 'One glance equilibrium chart‘, or 'Chart balance at a qglance'.

DefinitionsDefinitionsDefinitionsDefinitionsIchimoku Kinko Hyo is constituted by five lines:

Tenkan-Sen (Conversion line)(Highest High + Lowest Low)/2 for the past 9 periods.

Kijun-Sen (Standard line)(Highest High + Lowest Low)/2 for the past 26 periods.

Chiko Span (L i S )Chikou Span (Lagging Span)Current price - shifted backwards 26 periods.

Senkou Span A (Faster Span A)Senkou Span A (Faster Span A)(Tenkan-Sen + Kijun-Sen)/2 plotted 26 periods ahead.

Senkou Span B (Slower Span B)(Highest High + Lowest Low)/2 of 52 periods, plotted 26 periods ahead.

Ichimoku Price GraphIchimoku Price GraphIchimoku Price GraphIchimoku Price Graph

Ichimoku trading strategiesIchimoku trading strategies

Kumo Breakout Tenkan Sen/Kijun Sen Cross

Kumo BreakoutKumo BreakoutKumo BreakoutKumo Breakout

The latter two lines – Senkou Span A and pSenkou Span B – form the unique Kumo feature of the system. To indentify the y ytrend, the first thing is to observe this component with the price and Chikou p pspan.

a) Price versus Kumo)b) The Kumo versus Chikou Span

Tenkan Sen/Kijun Sen Cross Tenkan Sen/Kijun Sen Cross

When we use the Ichimoku Kinko Hyo system as a trading system,we don't just want to get important information's about thej g pmarket, but we also want to get exact entry and exit signals from it.

Strong buy signal: cross happens above the Kumo

Strong sell signal: cross happens below the Kumo

N l b / ll l h h b d f h KNeutral buy/sell signal: cross happens in the body of the Kumo

Weak buy signal: cross happens below the Kumo

Weak sell signal: cross happens above the Kumo

Support and ResistanceSupport and ResistanceSupport and ResistanceSupport and ResistanceAll Ichimoku lines are support and resistance lines, however they don't have the same strength. they don t have the same strength.

The strength order of the support levels would be:1.The bottom of the Kumo2 The top of the Kumo2. The top of the Kumo3. The Kijun-Sen4. The Tenkan-Sen

The strength order of the resistance levels would be:1. The top of the Kumo2 Th b f h K2. The bottom of the Kumo3. The Kijun-Sen4. The Tenkan-Sen

Minimum trading requirementsMinimum trading requirements

These are the minimum requirementsthat you should always check to be ableto make a trading decision with Ichimoku:

- the price vs Kumo- Tenkan-Sen vs Kijun-Sen- Chikou Span vs Kumo and Price

These are the minimum requirements.Always check them in this order.

The timeframes for tradingThe timeframes for trading

It is always recommended to trade only in thedirection of the higher timeframes. I would advice togcheck at least two higher timeframes, so if you forexample want to enter on the 15M timeframe, checkthe H1 and H4 charts first. If you enter on the H1h h h k h H4 d D il h fichart, then check the H4 and Daily charts first, etc.

When checking the higher timeframes, please checkat least the previous four minimum requirements.Always start from the higher time frames andAlways start from the higher time frames andproceed to lower time frames then and never enteragainst the higher timeframes. (It is possible to enteragainst them with some special Ichimoku techniquesagainst them with some special Ichimoku techniques,but at this beginner stage the best thing is to alwaystrade in the direction of the higher trend.)

Stop LossStop Loss

You should always use a stop loss, no matter what. Evenwith Ichimoku. In the support/resistance lines chapter Idescribed that the strongest support/resistance line is theother side of the Kumo It follows that it is a good idea toother side of the Kumo. It follows that it is a good idea toput the safety stop to that level + a few pips buffer. It isalso a commonly used technique to put the stop loss toth l t hi h/l + b ff th l t d b l l +the last high/low + buffer, or the last round number level +buffer.

ExitsExits

.A position is closed by the stop loss, or can be closed manually (usually in profit). There are many good techniques regarding to the take profit targeting, in this book I will only mention a few basic ones that are mostly recommended for beginners.gThe three main basic methods to close position are:

close if the price crosses back the Kijun Sen-close if the price crosses back the Kijun-Sen

-close if it reaches a round number level

- close after x amount of pips in profit