Bybit allows you to use a large number of indicators in your trading. Among them, the Ichimoku Kinko Hyo is often used by traders. Ichimoku Kinko Hyo is one of the deepest technical analysis, and you need to know how to use it.
What is Ichimoku Kinko Hyo?
Ichimoku Kinko Hyo is a technical indicator published by Goichi Hosoda, who was active at a Japanese newspaper company, under the pen name Ichimoku Yamajin. This indicator is used not only by Japanese people but also all over the world as a technical indicator. The Ichimoku Kinko Hyo is based on the concept that “the market moves in a direction that disrupts the equilibrium between buyers and sellers.” In other words, it is said to be an indicator for finding the next direction. It has now become a popular analysis method, and some exchanges use it as information. In addition to this method, an increasing number of people are also thoroughly analyzing Bitcoin and other currencies using moving averages and Bollinger bands.
How to read Ichimoku Kinko Hyo
I would like to explain the basic view of Ichimoku Kinko Hyo. Each line displayed on the Ichimoku Kinko Hyo has a meaning, so be sure to remember it. The part surrounded by the red frame below is the chart, with Ichimoku Kinko Hyo attached. When checking, consider whether the current crypto exchange’s leverage, fees, and chart data are decreasing or increasing.
The Ichimoku Kinko Hyo has the following lines.
Conversion line (blue line): (highest price for 9 days + lowest price for 9 days) / 2
Reference line (red line): (Highest price for 26 days + Lowest price for 26 days) ÷ 2
Leading span 1 (yellow-green line) = (reference line + conversion line) ÷ 2 preceded by 26 days
Leading span 2 (pink line) = (Highest price for 52 days + Lowest price for 52 days) ÷ 2 with 26 days ahead
Lagging span (green line): 26 days behind the closing price of the day
The word “cloud” is often used in Ichimoku Kinko Hyo. The “cloud” indicates the range between Senkou Span 1 and Senkou Span 2. The idea is to buy the “cloud” when the candlestick breaks above and sell when it breaks below. And if the candlestick is above the reference line, it can be seen that the upward pressure is strong, and if it is below it, it is weak. Buy when the conversion line crosses above the reference line and sell when it crosses below. The Lagging Span line signals to buy when above the candlestick and to sell when below it.
Advantages of Ichimoku Kinko Hyo
The advantage of the Ichimoku Kinko Hyo is that it is effective when the market is calm. Markets, by definition, do not move all the time. As it is said that the range occupies 80% of the total, the market does not easily show a trend. Therefore, this table is often used to suppress the initial movement of the next trend. It is an indicator that traders can also recognize by visually seeing the next trend.
How to set up Ichimoku Kinko Hyo
To set up Ichimoku Kinko Hyo, you must first open an account on Bybit. Let’s open an account first. Please refer to the article below.
After opening an account, log in and display the chart for any stock. And there is an item called indicator, so you can add an indicator by clicking it. You can display it by clicking “Ichimoku Kinko Hyo”.
Now you can display the indicator. To edit the indicator, the eye mark to the right of “Ichimoku” is hidden, the gear is settings, the x is delete, and “…” is detailed settings.
Click the gear to open the settings screen. You can change the line type and style, so please try it.