Part two of my Chikou span guide. In this guide I show traders how we can use the Chikou span to plot strong support and resistance lines.

1. Trading the Cloud - The Chikou Span (Part two)
In this chapter I want to talk about how the Chikou span can be used as a pure
Support and Resistance indicator. I have decided to dedicate a whole post to
this, so lets get started.
The Chikou Span can provide clear
levels of Support and Resistance
One of the main things that is often overlooked or not really talked about is the fact
that the Chikou span can be used to reference some very powerful support and
resistance lines.
To begin to understand, look at this chart

2. Looking at the chart above, you can see that the chikou span can provide support
and resistance lines for future moves. Because the chikou span represents prior
closing prices, it is perfect for mapping past areas of support/resistance.
We can find these Support and Resistance lines by drawing a horizontal line across
the 'points' created by the Chikou span, this helps us to see these key levels and
utilise on our analysis and trading decisions.
In the chart above I have taken an example of support and resistance by drawing a
line across 3 points of the chikou span.
I will break this down to explain it better.
As you can see in the first instance, price at first respected the support, but then 11
candles later broke through, turning the support into a resistance.
Once a support line is broken it becomes resistance, and visa versa.
Now lets look at the second point of resistance

3.
You can now see price again respected the resistance and struggled to break
through. until 6 candles later where it seems to have broken upwards but soon
dropped back below.
So we are at the point on the chart where price is undecided on direction.
Will it respect the resistance and move down?, or will it respect the support and
move up?

4.
Luckily because price is now trading in the Kumo cloud we are advised
to not open any new trades until price breaks out from either side.
And of course you know this because you should have read my beginners Kumo
trading guide.....right?.....good.
So we now wait, if price breaks above Kumo we can open a BUY trade
if price breaks below Kumo cloud then we would open a SELL trade.
This is a great example of how we can use 2 or more of the components
of ichimoku to decide where price will move.
There is a lot more detail to go into about how we can use the Chikou span as a
Support and Resistance tool, including how sometimes it can almost mimic the
common S/R Fibonacci indicator which is used by most Forex traders
worldwide, I will be covering this in my advanced ichimoku guides in future blog
posts.
Lastly I want to leave you with this chart.

5. You can see by just adding some simple lines across recurring points of the Chikou
Span can help you plot some very reliable Support and Resistance areas.
load up some charts on your PC and try doing this yourself now.
If you have any questions or there is something you didn't understand and need a
little more help, don't hesitate to leave a comment below and I will do my best to
help you.
We have now covered the basics of the Chikou Span, in my next blog post I will be
looking at the Tenkou Sen.
See you then
Chris (admin)