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Ichimoku Cloud

Written by Administrator Thursday, 25 June 2009 10:00
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Ichimoku Cloud

The Ichimoku Cloud indicator was developed before World War II by a Tokyo newspaper writer.  It is designed to display support and resistance levels, trend direction, and entry/exit points.



The general idea behind this tool is that if price action is above the cloud, the overall trend is bullish, and if below the cloud, the overall trend is bearish.

There are also moving averages (the Tenkan and Kijun lines) which act like a MACD crossover signal with the Tenkan crossing from underneath the Kijun as a bullish signal, while crossing overhead giving a bearish signal.

Tool Calculation

  • Tenkan Line; (highest high + lowest low)/2 calculated over last 9 periods.
  • Kijun Line; (highest high + lowest low)/2 calculated over last 26 periods.
  • Chikou Span; (most current closing price plotted 26 time periods back.
  • Senkou Span A; (Tenkan line + Kijun Line)/2 plotted 26 time periods ahead
  • Senkou Span B; (highest high + lowest low)/2 calculated over past 52 time periods, sent 26 periods ahead

Properties



Tenkan Plot Style:  This field expands to display options for the Display Type, Width and Line Colour of the Tenkan line.

                                   

                                    Display Type:  Allows you to select between Line, Dot, Histogram and Step.
                                    Width:  This slider bar allows you to adjust the width of the Tenkan Line.  Sliding the bar to the left will set the line to
                                    display thinner.  Sliding the bar to the right will set the line to display thicker.
                                    Line Colour:  Allows you to select the display colour of the Tenkan Line.

Kijun Plot Style:  Includes the same options for Display Type, Width and Line Colour as those in the Tenkan line, however they effect the Kijun line.

Chikou Plot Style:  Includes the same options for Display Type, Width and Line Colour as those in the Tenkan line, however they effect the Chikou line.

Cloud Colour:  Allows you to adjust the display colour of the shaded cloud section of the tool.

Cloud Transparency:  This slider bar allows you to adjust the transparency of the shaded cloud section of the tool.  Moving the slider to the left will increase the transparency (making it lighter), moving the slider bar to the right will decrease the clouds transparency (making it darker and more opaque).

Tenkan Periods:  The number of bars that are used in the calculation of the Tenkan line.

Kijun Periods:  The number of bars that are used in the calculation of the Kijun line.

Span B Periods:  The number of bars that are used in the calculation of the Senkou Span B line.

Calc Style:  This option is used to set the type of calculation for the averages. The calculation options are Exponential, Simple, Weighted, Smoothed, or Modified.

Tool Name:  Allows you to enter a custom name for the tool, as it displays in the Structures panel.

Transparency:    Use this slider bar to adjust the transparency of the tool.  Moving the slider to the left will increase the transparency of the tool.

Visible:    Un-tick this checkbox to hide the tool from the chart.

Offset:    Moves the tool forward or backward in time. The offset is measured in bars, so a value of 2 will push the tool forward 2 bars and -2 will move the tool back 2 bars.
Last modified on Friday, 17 July 2009 12:48
More in this category: « Midos SI Tool Overview »