The Mountain Man Is Back,
This Time In Computerized
Ichimoku Charts by Ken Muranaka
A Japanese charting technique
developed early in the 20th century is enjoying renewed popularity.
Invented before World War
II by a Tokyo newspaper
writer who called himself
"Ichimoku Sanjin" (a pen
name meaning "a glance of
a mountain man"), ichimoku charts
are becoming a popular tool for
Japanese traders once more, not
only in equities but also in currencies, bonds, indices, commodities,
and options. Literally, ichimoku
means "one look"; a chart of this
style is referred to as ichimoku
kinkou-hyou ó the table of equilibrium prices at a glance.
Ichimoku's guidebook on the
charts finally appeared in 1968,
long after the newspaper writer,
whose real name was Goichi
Hosoda, developed the technique.
All the computations involved no
more than taking midpoints of
historical highs and lows in various ways. Nevertheless, the completed chart presents a panoramic view of price movement. For years, Hosoda hired students to
do numerous calculations (or simulations) to come up with the
optimum formulas, long before personal computers or even
pocket calculators were the norm. He died in 1983, but the spirit
of his work is in computerized trading rooms in the form of
ichimoku charts. Although he also developed some wave
theories, Iíll only cover the chart style here.