Ichimoku Kinko Hyo: The name sounds intimidating to those unfamiliar with Japanese, and a quick glance at the formula makes this indicator seem far more complex than it is. In reality, though, the Ichimoku Cloud is a simple, straight-forward, and very revealing technical indicator. In fact, it might be the most single versatile and effective indicator available!
The Ichimoku Cloud was invented by journalist Goichi Hosada in 1969. This was an age before there were computers in every room of the house, so you know it can’t be that complex. And remember, Hosada was a journalist, not a mathematician or computer scientist. The Ichimoku Cloud’s calculations are deceptively simple, and when put together, they synthesize data in an amazingly effective way. In fact, the most surprising thing is that the Ichimoku Cloud is not more widely known: But you can use this to your advantage!
In this episode, you’ll learn:
- What “Ichimoku Kinko Hyo” means, and what the Ichimoku Cloud can do for you (0:33)
- The five plots on the Ichimoku Cloud (0:58)
- How Ichimoku Clouds are calculated (1:28)
- How Ichimoku Clouds can determine a stock’s trend “at a glance” (2:32)
This episode also shows features an in-depth example of a stock chart with an Ichimoku Cloud overlay, and tells you how you can add Ichimoku Cloud overlays to your own stock charts — for free.
The Ichimoku Cloud is effectively a chart onto itself. By using it as an overlay at StockCharts.com, you can define support and resistance, identify trend direction, measure momentum, and more. Be sure to watch this episode in full to get the most out of Ichimoku Clouds.
Happy Trading!
Manny Backus
CEO, Wealthpire Inc.
P.S. In our next video, we’ll be looking at Moving Average Envelopes. Be sure to tune in!
Episode 63 — DPO: Detrended Price Oscillator Removing Trend from Price to See Observe Stock Cycles!
