The closing price plotted 26 days behind. The Chikou Span, also known as the Lagging line, is the closing price
plotted 26 trading days behind, i.e. into the past, providing an
at-a-glance view of how the price compares to that 26 days ago. The trend is deemed to be upward when the Chikou Span is above the
closing prices and downward when it is below them. The relationship is
not always clear when looking at historical data, but becomes more
obvious when looking at current charts.
The Chikou Span is also considered of use for confirmation of trends, momentum, and support and resistance levels highlighted by the other Ichimoku elements.
- Tenkan Sen - moving average of the highest high and lowest low over the last 9 trading days. (Highest high + Lowest low) / 2 over the last 9 trading days
- Kijun Sen - moving average of the highest high and lowest low over the last 26 trading days. (Highest high + Lowest low) / 2 over the last 26 trading days.
- Senkou Span A - the average of the Tenkan Sen and Kijun Sen, plotted 26 days ahead. (Tenkan Sen + Kijun Sen) / 2 plotted 26 days ahead
- Senkou Span B
- the average of the highest high and lowest low over the last 52 days,
plotted 26 days ahead. (Highest high + Lowest low) / 2 over the last 52
trading days plotted 26 days ahead.
- Chikou Span - the closing price plotted 26 days behind.
Еhere are many signals of Ichimoku indicator to open the trades. I know about 6 signals (but it is much more signals in combination with each other):
- Tenkan Sen / Kijun Sen Cross - very weak signal but it is coming as the first one ... but it may be a lot of false signals
- price crossing Kijun Sen - more strong signal
- price crossing Senkou Span A line (Kumo Breakout)
- price crossing Senkou Span B line (Kumo Breakout)
- Senkou Span A crossing the Senkou Span B (trend reversal)
- Chikou Span crossing historical price - it is most strong signal for Ichimoku but it is lagging on timeframes started with H1, and not lagging for lower timeframes.
The combination of all those 6 signals = Ichimoku indicator.
