Kijun-Sen

By
rjonesx
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What is ‘Kijun-Sen’

The Kijun-Sen is a major indicator line and component of the Ichimoku Kinko Hyo indicator, also known as the Ichimoku cloud. It is generally used as a metric for medium-term momentum. The Kijun-Sen line calculation utilizes the following formula:

Explaining ‘Kijun-Sen’

The Kijun-Sen is almost always used, specifically, in combination with the Tenkan-Sen to generate predictions of likely future price movements. When the Tenkan-Sen line moves above the Kijun-Sen line, a buy signal is created. A sell signal is created, conversely, when the Tenkan-Sen line moves below the Kijun-Sen line. The Kijun-Sen line, along with each individual element of the Ichimoku cloud method, should never be considered in isolation but considered in context with the entire chart.

Kijun-Sen Formula & Calculation

The Kijun-Sen formula is the Highest High plus the Lowest Low divided by two for the previous 26 periods. The fomula calculation is represented as (Highest High + Lowest Low) / 2.

Ichimoku Cloud

The Ichimoku cloud method was developed and published in 1968 by Goichi Hosoda, a Tokyo newspaper writer, along with a number of assistants running various calculations. While this method is intimidating to many traders, due to the various lines created once applied, it is readily utilized by Japanese trading rooms as it provides a variety of tests on price action and allows for higher probability trades. There are four major components of this method.

Tenkan-Sen

The Tenkan-Sen, as indicated earlier, is most commonly used in conjunction with the Kijun-Sen to generate buy and sell signals. The formula for its calculation takes the highest high and the lowest low and divides it by two. It is calculated over the past seven to eight time periods.

Kijun-Sen

The Kijun-Sen is typically viewed as a trigger line for traders that implement the Ichimoku cloud method. Its calculation is identical to that of the Tenkan-Sen, except for the fact it accounts for the past 22 time periods, allowing for a much more accurate gauge on long-term momentum.

Senkou Span A

This span refers to the sum of the Tenkan and the Kijun, divided by two. This calculation is plotted ahead of current price movement by 26 time periods.

Senkou Span B

This span is the sum of the highest high and lowest low, divided by two. The calculation is taken for the past 52 time periods and, like span A, is plotted ahead 26 time periods.

Implications

After being plotted, the space between the Tenkan and Kijun is called the kumo, or cloud. This cloud is substantially thicker than general resistance and support lines and provides traders a much more thorough filter. The cloud typically accounts for volatility. When a line breaks through the cloud and movement follows, either above or below, a better trade is suggested.

Kijun Sen FAQ

How effective is Ichimoku?

One hour period will make Ichimoku work extremely well, below that daily is unsafe. Ichimoku is a powerful indicator for long-term trades from my little experience. I’ve discovered it works very well on 3-minute future charts. April 20, 2011.

How do I use lag Ichimoku lag?

Key Takeaways One of the five segments of the Ichimoku Kinko Hyo is the Chikou. Plotting 26 periods closing prices behind the last candlestick/bar creates it. It gauges the momentum of an asset and identifies potential changes in the trend. More items… Jul 14, 2019

How successful is Ichimoku?

Naturally, Japanese traders know Ichimoku very well. You’ll discover Ichimoku functions very well with their markets if you study it, uncannily respecting cloud support and resistance. Ichimoku is incredible as a secondary indicator as far as I’m concerned.

How do you read Ichimoku indicator?

Ichimoku cloud can be bearish or bullish. Take a look at the Leading Span A and Leading Span B especially these lines’ position at the graphic and cloud. Leading Span A increasing above Leading Span B line indicates possible bullish trend (bullish kumo). Dec 11, 2019

How do I trade Ichimoku trading strategy?

10:22 11:53Suggested clip · 87 seconds Best Ichimoku Trading Strategies For Beginners (Ultimate Guide to …YouTube Start of suggested clip End of suggested clip

Which time frame is best for Ichimoku?

The kind of trader you are determines this. You can use Ichimoku on a shorter period, from a 1-minute chart up to six hours, if you’re a day trader or scalper. Otherwise, you can use it on the daily and weekly charts if you are a longer-term trader like me. Oct 6, 2014

How accurate is Ichimoku cloud?

We can notice the rise in accuracy here provided by the Ichimoku signals to the overall algorithm. There’s just under 11% increase in accuracy for predictions over 5 and 10-day timeframes and around 9% for 15, 30, and 60-day timeframes.

Further Reading

  • Short-term foreign exchange rate trading based on the support/resistance level of Ichimoku Kinkohyo – ieeexplore.ieee.org [PDF]
  • Buying stock market winners on Warsaw Stock Exchange-quantitative backtests of a short term trend following strategy – ieeexplore.ieee.org [PDF]
  • The profitability of Ichimoku Kinkohyo based trading rules in stock markets and FX markets – onlinelibrary.wiley.com [PDF]
  • Can the Leading Us Energy Stock Prices Be Predicted Using Ichimoku Clouds? – papers.ssrn.com [PDF]

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