Chikou span tells you whether market is bullish or bearish
Chikou span is one of the five lines of Ichimoku Kinko Hyo, it is important to read Kumo formation and Tekan - sen, Kijun - sen along with this Chikou span to read the market as a whole.
Chikou span is shifted 26 candles, so it just measure the number of the candles from current forming candle. What does that mean?
What does that mean Chikou span shifted 26 candles backwards?
The answer of this: IT SHOWS THE MOMENTUM OF MARKET.
The momentum of market is very important.
In Ichimoku Kinko Hyo, Chikou span takes a great part to capture the momentum of market.
The momentum in Ichimoku Kinko means the buyers and sellers equilibrium and Ichimoku as the name suggests interpret you can interpret the market at a glance where the market is bull biased or sell biased.
If the Chikou span is below the the candles that means the market is bearish and if the Chikou span is above the candles that means bullish market momentum.
Chikou span location is very important because it shows the marketing momentum whether buyers and sellers are dominant or winning, losing.
Chikou span is below the candles meaning that for the last 26 candles or 26 trading days the sellers are winning.
If Chikou span is above the candles, that's corresponding above the candles so that means for the last 26 candles or 26 trading days the buyers are winning and sellers are losing.
When you see exactly Chikou span overlaps with the candles, is very close to the candles it's been range market as a whole, that means buyers and sellers for the last 26 candles or 26 trading days are not winning not losing.
BREAK EVENT:
Breakout is very important. When you see exactly Chikou span breaks the candles and afterwards that's correspond was supported or resistance by the candles and:
Move upwards: buyers will follow, sellers will close positions so we can expect that more buyers in the market than sellers because buyers are dominant, buyers will follow this uptrend and the market tends to go up afterwards.
Move downwards: sellers are wining, buyers are losing the market, sellers will follow, buyers will close positions and the market goes down this way.
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