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Understanding Crossing Signals in Ichimoku Kinko Hyo

The Ichimoku Kinko Hyo is a comprehensive technical indicator that helps traders identify trends, support and resistance levels, and entry and exit points. Among its many components, the Tenkan-sen and Kijun-sen crossover signals are particularly useful for detecting trend changes. In this article, we'll explore in detail the different types of crossover and their interpretation.

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What is a Crossover with Ichimoku?

A crossing occurs when two Ichimoku lines meet and cross. The most closely watched crossings are those between the Tenkan-sen (conversion line) and the Kijun-sen (base line). These crossings can indicate a change in trend, or confirm an existing trend.

Crossbreed types

  1. Golden Cross:

    A bullish cross occurs when the Tenkan-sen crosses above the Kijun-sen. This indicates a potential bullish reversal or continuation of the uptrend. If this cross occurs above the Kumo, the signal is even stronger.

    Calculation example :

    • Tenkan-sen = Average high and low over the last 9 periods.
    • Kijun-sen = Average high and low over the last 26 periods.

    When the Tenkan-sen (fast line) exceeds the Kijun-sen (slow line), this signals a potential purchase.

  2. Dead Cross:

    A bearish cross occurs when the Tenkan-sen crosses below the Kijun-sen. This indicates a potential bearish reversal or continuation of the downtrend. If this cross occurs below the Kumo, the signal is even stronger.

    Calculation example :

    • Tenkan-sen = Average high and low over the last 9 periods.
    • Kijun-sen = Average high and low over the last 26 periods.

    When the Tenkan-sen (fast line) crosses below the Kijun-sen (slow line), this signals a potential sale.

Interpreting crossovers

Crossover signals should always be interpreted in the context of the general trend and the price's position relative to the Kumo.

  • Bullish crossing above Kumo: Strong buy signal.

  • Bullish crossroads inside Kumo: Moderate buy signal.

  • Bullish cross below Kumo: Weak buy signal.

  • Baissier crossing below Kumo: Strong sales signal.

  • Baissier crossing inside Kumo: Moderate sell signal.

  • Baissier crossing above Kumo: Weak sell signal.

Practical example with ichimoku

Suppose you analyze the EUR/USD chart. You see a bullish cross above the Kumo. This indicates a high probability of a price rise. You could therefore consider opening a long position (buy).

Conclusion

The Tenkan-sen and Kijun-sen crossover signals in the Ichimoku Kinko Hyo are powerful tools for identifying trend changes and trading opportunities. By understanding how to interpret these signals in the context of the general trend and the Kumo, you can improve your trading decisions.

We hope this article has helped you better understand crossover signals. If you have any questions or would like to share your experiences, don't hesitate to join us on social networks with the hashtag #xenesy and identifying @xenesy_project. Happy trading!

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