Kijun Line (Base Line)
Candlefocus EditorThe Kijun Line is the midpoint of the last twenty-six time periods. It is calculated by taking the highest high and lowest low of the last twenty-six time periods and calculating the average of the two. This then becomes the Kijun Line, which will then be plotted onto a chart in order to be utilized further. It's worth noting that the Line is only designed to calculate a midpoint but can be used in several ways.
The Kijun Line is used to indicate the trend of the price. If the price is above the Kijun Line, the recent price momentum is to the upside. On the other hand, if the price is below the Kijun Line, the recent price momentum is to the downside. Additionally, traders look for the 'Kijun Tenkan cross.' This is a scenario in which the Kijun Line crosses over the Tenkan Line, a related technical indicator, to indicate a potential change in price.
The Kijun Line and Tenkan Line, along with the other elements of the Ichimoku indicator, can also be used to generate trade signals. This indicator is popular due to its ability to help assess the strength or weakness of the current trend and generate trading signals that might be missed by other indicators.
The Kijun Line is a tool that can be quickly accessed to provide an indication of potential price movements. Being able to identify potential price movements is useful to traders as it can allow them to enter and exit trades at strategic times and enhance their overall trading performance. That being said, it is not without its limitations, and if used incorrectly, it may lead to unsatisfactory results.