Ichimoku Price Margin Theory
The Price Margin Observation Theory is one of the three core essences of Kinkou-hyo (Ichimoku):
- Time Theory
- Wave Movement Theory
- Price Margin Observation Theory
Wave theory tells you where in the structure price is. Price margin observation answers the next question: how far the movement should travel. Hosoda set out four methods of observing price margins, known as the four calculated values.
The reference wave
All four targets are projected from a completed N wave — three movements defined by three points:
- A — the origin of the impulse (the swing low in a rising market)
- B — the end of the impulse (the swing high)
- C — the end of the correction
The four calculated values
| Value | Projection | Reads as |
|---|---|---|
| E | B + (B − A) | The impulse repeated from its own high |
| V | B + (B − C) | The correction repeated above the high |
| N | C + (B − A) | The impulse repeated from the end of the correction |
| NT | C + (C − A) | The net advance repeated from the end of the correction |
E is the most frequent of the four. NT is infrequent and appears only in the case of small corrections. In a falling market the same four values are projected downwards, with A as the swing high and B as the swing low.
Reading the targets together
The four values are not four competing forecasts. In practice they cluster: two or three of them often fall close together, forming a target zone rather than a single price, while the remaining one sits further away as an extended objective. A zone where several calculated values coincide carries more weight than an isolated level.
How far apart they fall is governed entirely by the depth of the correction. A shallow correction pushes V and NT close to the high and leaves E and N far above; a deep correction spreads them out differently. This is why the wave structure has to be read first: get A, B and C wrong and all four targets move.
Where the targets sit on the chart
Projected levels are most useful when they are read against the rest of the Ichimoku framework rather than in isolation. A calculated value that lands on the far edge of the Kumo, or on a previous swing high, is a stronger objective than one that lands in open space. Equally, the time element tells you when the move should be reaching those levels — a target that is not reached within its expected time window is itself information.
Hosoda did not establish a rigid system, but a framework meant to focus attention on the relevant issues. Price, wave and time are three readings of the same movement.
Price margin observation works together with the Time Element and Wave Theory — none of the three is meant to be used in isolation. You can plot the full Ichimoku on live crypto markets with the free chart.