Ichimoku Indicator (Ichimoku Kinko Hyo)

Description of the Ishimoku indicator

Ichimoku indicator (Ichimoku) was created in Japan to work with the Nikkei stock index. The author of the indicator is an analyst Goichi Hosoda, Ichimoku Sanjin is his pseudonym. He considered his indicator as the development of the concept candlestick chartTherefore, it is recommended to use Ishimoku with a candlestick chart.

Indicator for forex Ishimoku can be called trending, it is quite complex, it consists of lines, each of which is itself an indicator, which marks the middle of the price range over a period of time.

Detailed review of the Ishimoku indicator

Image. 1

There are five lines in total (Fig. 1). The line Tenkan Sen (marked with number 1 in Fig. 1) is the average of the sum of the highest maximum and the lowest minimum for the last 9 periods. The line shows the direction of the existing trend, it is a short-term line. If the Tenkan-Sen is directed upwards - the trend is upward, if the line is directed downwards - the trend is downward. If the Tenkan-Sen is parallel to the time axis, the market is dominated by sideways movement.

Kijun-sen (2) is the main line, it shows the average of the sum of the highest maximum and the lowest maximum for the last 26 periods, the principle of interpretation of this line on the chart is generally the same as for the previous one. Tenkan Sen and Kijun-sen, in fact, are moving averages.

Senkou-Spen A (3) - leading line, shows the middle of the distance between the Tenkan-Sen and Kinjun-Sen, which is shifted forward by the value of the second time interval by 26 periods, this is a possible resistance and support line.

Also leading is the line Senkou Span B (4), which shows the average of the maximum and minimum price for the third time period, shifted forward by the value of the second time interval by 52 periods, also predicts support and resistance lines.

The area between Senkou Span A and B lines is shaded and forms an Ishimoku cloud, i.e. Senkou Span A and B lines are the boundaries of this cloud. Chinkou Span (5) shows the closing price, it is shifted back by the value of the second time interval by 26 periods and it is lagging.

The 9-26-52 settings of the Ishimoku indicator are considered standard, but other settings are also used, for example, 12-24-120 are preferable for working in the strong trend, 120-240-480 - in flat conditions to get a small number of more accurate signals. The Ishimoku indicator provides a lot of information and an experienced trader, who knows how to use it, needs only a cursory glance at the indicator to assess the market situation with high confidence.

Log in to your broker's terminal, add the Ishimoku indicator to the chart and see what comes out

Ishimoku indicator in MetaTrader platforms (4 and 5)

Indicator Ishimoku is included in the list of preinstalled tools on the main forex trading platforms MetaTrader4 and Metatrader5. Since Ishimoku is an addition to the candlestick chart, you need to install it in the terminal (Fig. 2).

Ishimoku in the MetaTrader 5 forex trading platform

Image. 2

To install the indicator, you need to open the terminal, go to "Indicators" section, Ishimoku is placed in the sub-section of trend indicators (Fig. 3).

In MT5 Ishimoku is placed in the sub-section of trend indicators

Image. 3

The standard periods of 9-26-52 Ishimoku lines (Fig. 4) are used in the Ishimoku indicator. The settings can be changed.

Ishimoku standard indicator settings for forex

Image. 4

Ishimoku indicator in broker terminals

In the trading terminal for binary options Binomo the indicator Ishimoku is represented as "Ishimoku cloud" (Fig. 5). In this terminal non-traditional names of the lines are given, but the settings are also standard and can be changed.

Ishimoku in the Binomo binary options broker terminal

Image. 5

In the trading terminal of the broker FiNMAX Ishimoku is also there, it is set up similarly as in MT4 (Fig. 6). Similarly the indicator is used on the platforms AMarkets (site) и 24option (site).

Ishimoku in the terminal of binary options broker Finmax

Image. 6

In the trading terminal OlympTrade (site) the Ishimoku indicator is in the preset list, the standard settings are shown directly above the lines (Fig. 7), the parameter change function is located there and you can disable the indicator there as well.

Ishimoku in the terminal of binary options broker Olimp Trade

Image. 8

The Ishimoku indicator settings are located in the OlympTrade terminal on the left side (Fig. 8).

OlympTrade Ichimoku settings in the trading terminal


Brokers Alpari (site), RoboForex (site), Exness (site) offer to work with MetaTrader platforms, on which Ishimoku is pre-installed.

Ishimoku indicator signals

Indicator Ishimoku generates fairly accurate signals to buy and sell, but the interpretation of signals requires proven skills (Forex Trading Training).

Ishimoku signals can be relatively weak or strong. Weak signals include crossing the price and cloud lines, for example, when the price enters the cloud zone, which for some traders is a signal to open a position quickly. A strong signal is a price exit from the cloud, which indicates the beginning of a new trend, at which point traders recommend opening a position as quickly as possible.

From specific signals, for example, when the line Tenkan-sen crosses Kijun-sen from the bottom upwards - it is regarded as a signal to buy (pattern "Golden Cross"). If Tenkan-sen crosses Kijun-sen from top to bottom, it is a signal to sell (pattern "Dead cross"). This type of indicator signal is considered weak and it is not recommended to react to it for novice traders. But it is considered to be reasonable to buy when prices are below the cloud, and to sell when prices are above the cloud.

Crossing the Senkou Span lines is a strong signal, it shows the approach of a trend change. Breaking the Senkou Span B line by the price chart is also a strong signal, which shows with a high probability the onset of a new long-term trend. An important signal of the indicator is the so-called "three lines signal", which is interpreted as a signal of a missed trend start. Within the "three lines" signal, the price chart, Tenkan, Kijun lines, cloud from top to bottom are lined up consecutively.

The order of the lines can accurately confirm the direction and strength of the trend, for example, the lines lined up in a row, one way: Tenkan-sen, Kijun-sen, Senkou Span B, - confirm the uptrend, which is a signal to buy. The reverse order confirms the downtrend and is a signal to sell.

Chinkou Span signals are quite rare and strong, for example, if the Chinkou Span crosses the price chart from top to bottom, it is likely to form a downtrend, if the line crosses the price chart from bottom to top, it may be a signal of an uptrend.

Despite the complexity of the Ishimoku indicator, the number of signals it provides is limited, so over time you can learn to identify them quickly and with minimal errors. Virtually any of the signals can be the basis for a separate strategy forex trading.

Trading strategies based on the Ishimoku

To implement strategies on the basis of the Ishimoku indicator, it is necessary to pay attention to a number of peculiarities. In particular, the Ishimoku indicator works optimally on long timeframes, on small timeframes it shows too many signals.

The lines Kijun and Tenkan at crossing quite accurately predict the direction of price movement. Line Chikou performs the role of confirming at the intersection of lines Kijun and Tenkan. The strength of the trend is confirmed by movement out of the Ishimoku cloud, i.e. breakdown of support and resistance lines, and increases the probability of a profitable trade. The strategy on cloud breakdown is based on the price position towards the cloud - if the price is above the cloud at the close, an uptrend is formed, if it is below it, a downtrend is formed. This strategy implies working with a distinct trend.

Entry into trading is made at the close of the price, opening a transaction in the direction of the price movement, breaking through the cloud. The main difficulty in implementing the strategy is to identify the exact signal, the direction of the trend and the best time to enter, you can use the Chinkou Span line for this. To work on a breakout strategy, it is necessary to put stop losses at the points where the trend is expected to end. When the price reaches the stop loss, perhaps the direction of the trend changes and you need to rearrange the stop losses or exit the trade.

Despite the fact that Ishimoku is an informative indicator, some strategies are implemented with the help of additional indicators. For example, Stochastic (Fig. 9) allows to prevent trades when Ishimoku lags in determining the trend.

Ishimoku perfectly complements the Stochastic indicator

Image. 9

Stochastic is an indicator showing the position of the current price to prices for a certain time in the past. When working with Stochastic, sell trades are opened when the Ishimoku lines line up in order: Kijun - Tenkan-price, when the price breaks the cloud boundary and Stochastic does not show oversold.

Also with the Ishimoku applies Awesome Oscillator (Figure 10), one of Bill Williams' tools, which measures the strength of the trend. It is plotted on the chart as a histogram of green and red bars.

Working together with Ishimoku, Awesome Oscillator measures the strength of the trend


Accordingly, to open buy orders forex oscillator should be above the zero line and the bar should be green, but only when the candle closes above the upper line of the Ishimoku cloud.

A sell order is opened when the candle closes below the cloud, and the Awesome Oscillator column must be red and below the zero line. In the implementation of this strategy, it is necessary to pay attention to the crossing of Tenkan-sen and Kijun-sen - if there is one, it is not recommended to open a position.

The strategy on the intersection of Senkou Span lines takes into account the location of the lines to the cloud. Tracked crossing the line Senkou Span A line Senkou Span B. If the crossing is directed from the bottom up, it means that the trend is upward, if crossing from the top down, the trend is downward. The direction of the trend must be established before the crossing, that is, the crossing has a confirming character.

The probability of the desired result is higher when the price is placed on the cloud side, in the direction of the crossing - this is a strong signal. If the price is placed on the side of the cloud opposite to the direction - this is a weak signal, caution should be exercised when implementing the strategy. If the price is placed inside the cloud, it is a stronger signal and trade forecasts can be quite good.


Indicator Ishimoku - a complex tool that shows a large number of signals, allowing a fairly accurate determine the direction and strength of the trend, the dynamics of prices, to show entry and exit points.

This is not the most popular indicator, because it is difficult to interpret, works on long timeframes, but it has a stable group of fans, there are many training materials on the Internet.

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