Ichimoku

The Ichimoku study consists of 4 lines, calculated as follows:

1) Tenkan-Sen or Conversion Line = (Highest High + Lowest Low) / 2, for the past p1 periods;

2) Kijun-Sen or Base Line = (Highest High + Lowest Low) / 2, for the past p2 periods;

3) Senkou Span A or Leading Span A = (Tenkan-Sen + Kijun-Sen) / 2, plotted p4 periods ahead;

4) Senkou Span B or Leading Span B = (Highest High + Lowest Low) / 2, for the past p3 periods, plotted p4 periods ahead.

By default p1=9, p2=26, p3=52, p4=26.

Kumo, or Clouds is area between Senkou Span A and B.

Buy signal is generated when Tenkan-Sen crosses Kijun-Sen from below, sell signal is generated when Tenkan-Sen crosses Kijun-Sen from above.

Clouds play the role of support/resistance areas and help identify trends. When the price is above clouds, the trend is bullish. When the price is below clouds, the trend is bearish.