Thanks to this, we can compare the current price situation with that of 26 periods ago. Analysis of the Chikou relative to other levels of Ichimoku can confirm a new trend and its potential. Although all of the constructions on one single chart may seem a little daunting, the ultimate aim of the indicator is simplicity. You also don't have to worry about specific calculations, as MetaTrader 4 will perform them for you. It's more important to understand the basics of what each line represents.

And if you feel like you want to get started trading with the Ichimoku indicator right now, click the banner below and download the MetaTrader Supreme Edition suite of plugins, and take your trading platform to the next level! You don't need to download the Ichimoku indicator separately, as it comes bundled with the core tools of the platform. All you need to do is look at the list of Indicators within the 'Navigator' tab. The image below shows that there are four subfolders of indicators with the MT4 Ichimoku indicator, contained within the 'Trend' subfolder:.

Clicking on 'Ichimoku Kinko Hyo' opens a dialogue window, which lists the various graphical elements for the indicator. The default colours are shown in the image above. You can also easily configure other visual aspects via the dropdowns e. If you wish to set the periods, click on the 'Parameters' tab. The default values are as follows:.

Past performance is not necessarily an indication of future performance. Tenkan-sen red line represents short-term price movement. It is similar to a fast moving average. If the market price is above the Tenkan-sen line, it is a short-term bullish sign. If the price is below Tenkan-sen, it is a short-term bearish sign.

One function of Tenkan-sen is to clue us in with regards to the character of the market. This is because the direction of the Tenkan-sen line can suggest if the market is trending or not. A rising Tenkan-sen suggests an upward trend, and a falling line represents a downward one. As the line is calculated from price extremes, it will tend to flatten out when the market is not trending. Therefore, if Tenkan-sen is moving sideways, it suggests that the market is range-bound. As Ichimoku is primarily a trend-following system, you should only trade using Ichimoku when you are in a trending market.

Kijun-sen dark orange line represents medium-term price movement. Think of it as being a little like a slower moving average in comparison to Tenkan-sen. Once again, it can clue us into the trend, but over a longer time-frame. The interaction of Tenkan-sen to Kijun-sen can give us trading signals, in a similar fashion to a moving average crossover. That is to say, if the fast-moving Tenkan-sen crosses above the slower-moving Kijun-sen, it can be a signal to buy.

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A crossover of Tenkan-sen below Kijun-sen can be a signal to sell. Whether we follow these crossover signals is governed by the Chikou span lime green line that helps us see the big-picture trend of the market. Remember, the Chikou span plots the current closing price 26 periods back on the chart. If it is above the chart of price, it means that current prices are higher than previous ones. This is bullish.

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When the price is above the Chikou span, the current prices are lower than previously, suggesting a bearish tenor. You should use the Chikou span as a trade filter, only placing trades that agree with the overall trend.

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For example, if the Tenkan-sen crosses below the Kijun-sen, you would only sell if the Chikou span indicated a bearish overall trend. The kumo, or cloud, is the space bounded between the Senkou span A and the Senkou span B. If the price is above the cloud, it is a bullish sign. The top of the cloud acts as a first line of support, and the bottom of the cloud, as a second line. If the price is below the cloud, the reverse is true. It is a bearish sign, and the bottom of the cloud acts as the first level of resistance.

Logically, the top of the cloud is the second level of resistance. The wider the cloud, the stronger the expected support, or resistance. To jump in and start trying out the Ichimoku indicator in MetaTrader 4, completely risk free, click the banner below to open a demo account with Admiral Markets, at no cost!

This combination of factors, complemented by an analysis of multiple time units, provides excellent results to find a general trend and main levels of support and resistance. So with these facts in mind, let's start discussing some of the most significant strategies you can use with Ichimoku indicator:. Before covering some Ichimoku strategies let's explore an expert's view and take advantage of his hands-on experience in the subject. The below free webinar is hosted by expert trader - Paul Wallace.

Data range: from September 19, to October 11, Held on October 14, Keep in mind that past performance is not a reliable indicator of future results. As with other trading systems based on crossing averages, in Ichimoku we will find our buy and sell signals when the Tenkan Sen lines turn line cross the Kijun Sen standard line , and once we have well defined the current trend, we can trade based on this information.

As we have said before, the fast line is calculated on the basis of the last 9 data while the slow line is calculated based on the last Therefore, when the price moves, the fast line moves faster. That slow line. In the image below, the fast line is red and the slow line is blue.

How To Use The Ichimoku Kinko Hyo Indicator In MetaTrader 4 - Admirals

One of the simplest ways to locate the fast line is that when the market is in a lateral trend, the fast line is always closer to the price the sail than the slow line. The strength of these signals will vary depending on some characteristics, so it will differentiate different types of buy signals. But in the case of sales signals, there isn't much variation.

This is a special line, since it confirms any current trends with greater reliability than when comparing the price with the cloud, like in the first strategy.

When functioning as an additional confirmation, some traders only trade when the delay line shows that there is an opportunity. They wait patiently for this strategy to confirm the signals. As the image below shows, even when the Cloud strategy price vs. Start testing your strategies with the Ichimoku indicator today! Click the banner below, and start trading Forex with the powerful Ichimoku cloud, and all these time-tested strategies.

Ichimoku can also protect your trades, since we can also use it to generate exit signals and to place stop-loss orders. If we open a long trade using the line crossing strategy described above , we will get an exit signal from this long position when these 2 lines cross once again, but in the opposite direction. On the other hand, if we enter the market with a long position using the other two strategies above, we will obtain the exit signal when the price or the delay line crosses to the cloud in the opposite direction in which they crossed when He opened this position.

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We can use the Ichimoku to place a stop loss and to find several support and resistance points. Since the fast line, the slow line, or cloud can be used as possible support and resistance levels. Once these supports or resistances are broken, the price can have a boost, so you can move on to the next level of support or resistance.

Thus, stop-loss orders can be placed:. Also, in long positions, we can place the stop-loss a few pips below the most recent low. In contrast in short positions, the stop-loss can be placed a few pips above the most recent high.

Ichimoku Strategy #1 – The Ideal Ichimoku Strategy

We all know that the supports and resistances identified in higher time frames will have a greater impact on the price action. Therefore, the Ichimoku M15 and M5 analysis is essential. The Ichimoku M1 chart is used to take the position according to the signals described earlier in this article. It is advisable not to consider the crossings of the cloud Kumo if in 26 periods before, the price is within the cloud.