Kijun Line (Base Line)

Kijun Line (Base Line): Definition, Formula, and Trading Strategies

What is the Kijun Line?

The Kijun Line (Kijun-sen or Base Line) is a component of the Ichimoku Cloud indicator. It reflects the midpoint of price over a set lookback (standard is 26 periods) and is used to gauge medium-term momentum, identify support/resistance, and generate trade signals when paired with the Tenkan Line (Conversion Line).

Formula

Kijun-sen = (Highest High over last 26 periods + Lowest Low over last 26 periods) / 2

Standard inputs:
– Highest High = maximum price (high) over the previous 26 periods
– Lowest Low = minimum price (low) over the previous 26 periods

How to calculate

1. Find the highest high over the last 26 periods.
2. Find the lowest low over the last 26 periods.
3. Add those two values and divide by two.
4. Update this calculation at the close of each period.

How traders use the Kijun Line

• Momentum and bias: Price above the Kijun indicates upward bias; price below indicates downward bias. The Kijun effectively shows the 26-period midpoint.
• Signal generation: The most common signal uses the Tenkan Line (9-period midpoint).
• Tenkan crossing above Kijun = bullish signal (short-term momentum turning up).
• Tenkan crossing below Kijun = bearish signal.
• Confirmation: Traders typically confirm Kijun/Tenkan crossovers with other Ichimoku elements (e.g., price relative to the cloud) and price action. For example, buy signals are stronger when price is above the cloud.
• Support/resistance: The Kijun can act as a dynamic support or resistance level and is often used for entries, exits, or trailing stops.

Relationship to other Ichimoku components

Common elements of the Ichimoku indicator:
– Tenkan-sen (Conversion Line): 9-period midpoint — reacts faster.
– Kijun-sen (Base Line): 26-period midpoint — medium-term reference.
– Senkou Span A & B: define the cloud (leading support/resistance).
– Chikou Span: lagging price plot.

Use the Kijun in the context of the full Ichimoku system for more reliable signals.

Example (conceptual)

If the Tenkan (9-period midpoint) crosses above the Kijun (26-period midpoint) while price is above the cloud, that alignment suggests a stronger bullish signal. Conversely, crossovers that occur while price is inside or below the cloud are less reliable.

Kijun Line vs. Moving Average

• Kijun-sen = midpoint of the highest high and lowest low over a period (high+low)/2.
• Moving average = average of closing prices over a period.
  They often produce different values and thus provide different perspectives on trend and momentum.

Limitations

• Reactionary: The Kijun reflects past price action and is not predictive.
• Choppy markets: Frequent Tenkan/Kijun crossovers in sideways markets produce unreliable signals.
• Proximity to price: In non-trending conditions the Kijun often sits near price and loses discriminating power.
• Best used with other tools: Combining the Kijun with the cloud, price action, volume, or other indicators improves signal quality.

Practical strategies / tips

• Trade crossovers that align with the cloud direction (e.g., buy only when price is above the cloud).
• Use the Kijun as a trailing stop or target (price breaking and staying below Kijun can indicate trend exhaustion).
• Avoid relying solely on Kijun/Tenkan crossovers in low-volatility or range-bound markets.
• Combine with confirmation from price action (support/resistance, candlestick patterns) or trend strength metrics.

Key takeaways

• The Kijun Line is the 26-period high/low midpoint used to identify medium-term bias and support/resistance.
• Tenkan–Kijun crossovers generate the common Ichimoku trade signals; their reliability improves with cloud confirmation.
• It differs from moving averages and performs best when combined with other indicators and price-action analysis.