The Ichimoku Kinko Hyo 一目均衡表 or 'equilibrium at a glance' chart highlights higher probability trades in Securities markets. It is relatively new to Western Technical Analysis, but it's popularity has been increasing amongst financial markets traders.
Ichimoku charts applies a series of indicators on one chart, allowing traders to assess price action in three time frames - long, medium and short. This style of analysis enables the trader to see the 'whole' picture for any particular security.
A basic understanding of the components that make up the Ichimoku chart is essential to effectively applying this trading method. The method was developed in the 1920's and released to the public in 1968 by Tokyo financial journalist, Goichi Hosoda. It is believed that he employed more than 10,000 university students to backtest the indicators which came to make up the Ichimoku trading method.
Ichimoku charts is commonly used by many Japanese trading rooms because it offers multiple assessments of price action in many time frames and suggests trades with higher or lower probability for success. Traders new to the method may be confused by the 'busy looking' Ichimoku charts but a basic understanding of the indicators reveals a method which is quite simple in it's application.
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