MACD Histogram and Ichimoku Indicator

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The MACD Histogram is an important tool for technical analysis. It is used to gauge the strength of a trend and can be used to predict future price movements. The MACD Histogram is created by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. This difference is then plotted as a histogram, which oscillates above and below zero.

 

The MACD Histogram can be used to identify trends, momentum, and reversals. A rising histogram indicates that the 12-day EMA is above the 26-day EMA, which suggests that prices are likely to continue rising. A falling histogram indicates that prices are likely to fall in the near future. The MACD Histogram also generates buy and sell signals when it crosses above or below zero line.

 

Ichimoku Indicator:

The Ichimoku Kinko Hyo is a technical indicator that is used to gauge future price movement and momentum. The name Ichimoku Kinko Hyo translates to “equilibrium at a glance chart”. The indicator was developed by Goichi Hosoda, a Japanese journalist, in the late 1930s.

 

The Ichimoku Kinko Hyo is comprised of five different lines, which are used to identify key levels of support and resistance. These five lines are: the tenkan-sen, kijun-sen, senkou span A, senkou span B, and the chikou span.

 

The tenkan-sen (red line) is calculated by taking the highest high and lowest low over the last 9 periods and dividing it by 2. This line acts as a short term moving average. The kijun-sen (blue line) is calculated by taking the highest high and lowest low over the last 26 periods and dividing it by 2.

 

This line acts as a long term moving average. Senkou Span A (green shaded area) is calculated by taking the sum of Tenkan-Sen & Kijun-Sen divided by two & plotted 26 periods ahead.

 

Senkou Span B (purple shaded area) is derived from calculating 52 period highs & lows added together & divided by two, then plotted 26 time periods into future & finally Chikou span (lagging indicator) (yellow dotted line) plotted 26 periods behind price action.

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