Download The True Ichimoku Indicator (for MT5) Here

Ichimoku Kinko Hyo (IKH) is one of the best know indicators, and if applied correctly, it can have a high success rate. However, not all trading platform display the Ichimoku Kinko Hyo the way its developer has designed it. And yes, MetaTrader is one of them.

In this blog post I will show you what’s wrong with it, and I will give you a FREE correctly working indicator to download.

About the Ichimoku Kinko Hyo and its lines

Ichimoku is invented in the mid 30’s of the 20th century by the Japanse stock market analyst and journalist Goichi Hosoda. ‘Ichimoku Kinko Hye’ is Japanese for, diagram showing the equilibrium at a glance, and it gives its users a quick check to see if the market is bullish or bearish.

The Ichimoku Kinko Hyo system consists of 5 lines. 2 of these lines, the Tenkan Sen and Kijun Sen, show the equilibrium of the bulls and bears in the short term and the longer term. Another 2 lines, the Senko Span A and Senko Span B indicate the resistance zone in the chart, and the area between them is called the Kumo, or cloud.

The 5th line is called the Chiko Span, and it is a measure for the present market momentum. It is the close price of each candle plotted 26 candles back in time.

Below chart depicts the Ichimoku Kinko Hyo and its 5 lines:

  • Blue line =  Tenkan Sen
  • Purple Line = Kijun Sen
  • Light Green line=  Senko Span A
  • Pink line=  Senko Span B
  • Dark Green line=  Chikuo Span A
ichimoku-kinko-hyo

(Image by Trading View)

As this blog post is about the MetaTrader Ichimoku indicator, and not about Ichimoku Kinko Hyo in general, we won’t go deeper into that. For the detailed backgrounds about Ichimoku Kinko Hye itself go to Investopia and Wikipedia.

2 Platform Ichimoku’s compared

Let’s compare the MetaTrader Ichimoku indicator. Below 2 charts are close ups of the chart that is depicted above. It is the daily chart of the EURUSD currency pair. The 2 charts are from the platforms Trading View and MetaTrader. The Ichimoku indicator settings in both are the default settings of (9,26,52).

The upper chart is from the Trading View platform, displaying the correct Ichimoku Kinko Hyo (why it is correct will be explained later in this post). The lower one is from MetaTrader and shows an incorrect Ichimoku Kinko Hyo.

What’s the difference between these indicators?

The Tenkan Sen Kijun Sen lines are in both charts the same, so no issues with them. The difference can be found in the positions of the Chiko Span line and the cloud.

In Trading View the shifted Chiko Span (indicated with the red circle), is located at candle number 26. In MetaTrader it is located at the next candle, at candle number 27.

The clouds are not lined up either. This can be easily identified by looking at the hook in the cloud indicated by the blue circle. In Trading View the hook is under candle number 6, while in MetaTrader it is under candle number 5.

Why does it go wrong?

As explained earlier, the Chiko Span is the close price of a candle plotted 26 candles back. The Trading View Chiko Span is indeed 26 candles back, so it does display it correctly. MetaTrader plots it 27 candles back and it is wrong.

To explain the reason why it goes wrong, it is important to know that as per Hosoda’s ruleset, the first candle is always included in the count, and so this candle is always labeled number 1.

In MetaTrader the first candle is labeled candle 0, and so the second candle becomes candle 1. And yes, candle 27 is indeed 26 candles away from that second candle 1.

The same applies to the shift in the cloud. Again MetaTrader has shifted the cloud 1 candle too far, due to the wrong counting procedure of the candles.

A minor flaw, is that really that bad?

It’s only a minor flaw in MetaTrader, and it should not affect the trading results very much. Especially not if you just use the crossovers of the Kijun Sen and Tenkan Sen lines, as they are correct.

But if you use more sophisticated Ichimoku strategies than you will get different signals with the MetaTrader indicator.

It may not be a big issue, but if you really want to trade the Ichimoku as Hosoda as taught it, then you better not use the default Ichimoku indicator inside MetaTrader.

One solution for this is to go over from MetaTrader to Trading View.

Another fix is to download an Ichimoku indicator that does work correctly. Through below button you can download for MT5. It is the same as the Trading View indicator and it is free!

Download the FREE MT5 Correct Ichimoku Kinko Hyo indicator below

Installation instructions:

  1. Download the indicator
  2. Unzip the downloaded file.
  3. Open the MT5 terminal.
  4. Go to File/Open Data folder and open it. Next go to MQL5/Indicators folder, and copy/paste the indicator into it.
  5. Close the MT5 terminal (important) and restart it.
  6. Now find the indicator in the list of indicators and attach it to a chart.
  7. Done.

Add Comment