The Chikou Span is a very important part of the ichimoku indicator, it is often overlooked by many ichimoku analysts and websites.

1. Trading the Cloud - The Chikou Span
Welcome to the next part of my ichimoku mentoring guide - Trading the
Cloud. In the first four parts of the guide I covered the basics of the
Kumo cloud and hopefully you are starting to build your knowledge of
the ichimoku indicator. If you haven't read the four parts of the Kumo
guide, then I suggest you read it now before continuing.
Now I want start talking about the Chikou Span
Ok lets get started.
The Chikou Span
The Chikou Span is a very important part of the ichimoku indicator, it is
often overlooked by many ichimoku analysts and websites, Im not sure

2. why, as I consider it just as important as the Kumo cloud....
Chikou Span translates as "lagging line"
The reason the Japanese call this the lagging line is because the current
closing price is 26 periods in the past, so it 'lags' behind the current
price.
I know this can be a little confusing for some ichimoku beginners so I
will explain this a little clearer.
Look at this image below.
When I say the Chikou span lags 26 periods in the past, the easy way to
understand this is to see it as 26 candles in the past, as one candle
represents one period.
Some people often think there is a mistake with their chart when they
see the Chikou span for the first time, they often think that ichimoku
has not drawn the line properly or that the calculations are wrong, but I
promise this is normal and no, your not going crazy...
The Chikou span also mirrors price exactly. So we have an
exact representation of price 26 candles in the past.

3. There is a perfect reason why the Chikou span is designed like this, it
allows us to see how todays price action compares to the price action of
26 candles ago.
This is great for finding the trend direction and recognising strong
support and resistance levels.
so how does this work?
1. If the current close price is lower then the price of 26 candles
ago, this would indicate that there is a potential for more bearish price
action to come, since price always tends to follow trends.
2. If the current closing price is above the price of 26 candles
ago, this would then indicate the possibility for more bullish price
action to follow.
Because the Chikou span lags 26 candles behind the
price,it makes this easy to check 'at a glance'
This chart below should hopefully explain it a little clearer.

4. Please make sure that you fully understand the concept of the Chikou
span, as this can be one of the main stumbling blocks when learning the
ichimoku indicator.
Thats all for now, I will go into more detail in the next lesson so keep
checking back for updates
Chris (admin)