The Ichimoku Kinko Hyo charting system, which translates to “equilibrium at a glance chart”, was developed by Goichi Hosoda, a Japanese journalist, who wanted to build a system to allow a trader to quickly and easily appraise trend, momentum, and support and resistance levels. He began developing the system before World War II and it was published in 1968, after over twenty years of testing.
Ichimoku Chart Elements
The Ichimoku chart is made up of five separate elements which are designed to be considered together as a complete picture to provide a perspective on the equilibrium of the current price. These are:
Tenkan Sen (Turning line) – A moving average of the highest high and lowest low over the last 9 trading days.
Kijun Sen ( Standard line ) – A moving average of the highest high and lowest low over the last 26 trading days.
Senkou Span A (1st leading line) – The average of the Tenkan Sen and Kijun Sen, plotted 26 days ahead.
Senkou Span B (2nd leading line ) – The average of the highest high and lowest low over the last 52 days, plotted 26 days ahead.
Chikou Span (Lagging line) – The closing price plotted 26 days behind.
The area between the two Senkou Spans is called the Kumo (Cloud).
Marketcalls trading decisions on nifty is based on the kumo cloud alone i.e the trading rule is simply buy above the cloud and sell below the cloud with stop loss as a cloud itself. And Iam using the customised version of Ichimoku afl code with parameters 3,12,18. Anyhow iam not interested with those rest of the elements Tenkan Sen, Kijun Sen, Chikou Span it looks like a puppet for me with more noise in the system.
Any how all the 5 elements of Ichimoku are presented here in the AFL code. Download it