Ichimoku Kinko Hyo trading system...!
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These have been my buy signals since the DOW start started climbing
up the Ichi Cloud in February. Maybe these can be useful to some of you. GL!
The first and second strategies are anticipating a bullish TS/KS crossover. Even if the crossover doesn't
occur, you can still lock in gains by riding price up to KS. At that point you may consider selling
some of your positions if you are not confident that the crossover will occur. If all seems to be going well,
you can hold and exit as described below. (Exit when price closes below TS)
1
StochRSI(14,14) crossed above .8 within the past 1 day
(You may also use a value of above .5 here instead of .8)
price crossed above TS within the past 1 day
price < KS
Consider adding the following criteria as well
MFI(14) has been increasing for the past 3 days
2
StochRSI(14,14) > .5
price > ts
ks > ts
price < KS
For both 1 and 2 - Exit when price closes below TS
The third strategy is anticipating a breakout. Price is usually already in the cloud, on top, or just exiting the cloud.
3
StochRSI(14,14) > .5
price opened below TS
price closed above TS
ts > KS
price > KS
Consider also adding 1 or both of the criteria below
CMF(20) < 0
CMF(20) has been increasing for the past 2 days
For 3 - Exit when price closes below KS
Note - I like to use a stop loss of 15% but you may consider making it tighter depending on your risk tolerance
I hope to have some time to post charts on these strategies later. Please leave comments or questions if you have any. Thank you.
up the Ichi Cloud in February. Maybe these can be useful to some of you. GL!
The first and second strategies are anticipating a bullish TS/KS crossover. Even if the crossover doesn't
occur, you can still lock in gains by riding price up to KS. At that point you may consider selling
some of your positions if you are not confident that the crossover will occur. If all seems to be going well,
you can hold and exit as described below. (Exit when price closes below TS)
1
StochRSI(14,14) crossed above .8 within the past 1 day
(You may also use a value of above .5 here instead of .8)
price crossed above TS within the past 1 day
price < KS
Consider adding the following criteria as well
MFI(14) has been increasing for the past 3 days
2
StochRSI(14,14) > .5
price > ts
ks > ts
price < KS
For both 1 and 2 - Exit when price closes below TS
The third strategy is anticipating a breakout. Price is usually already in the cloud, on top, or just exiting the cloud.
3
StochRSI(14,14) > .5
price opened below TS
price closed above TS
ts > KS
price > KS
Consider also adding 1 or both of the criteria below
CMF(20) < 0
CMF(20) has been increasing for the past 2 days
For 3 - Exit when price closes below KS
Note - I like to use a stop loss of 15% but you may consider making it tighter depending on your risk tolerance
I hope to have some time to post charts on these strategies later. Please leave comments or questions if you have any. Thank you.
Last edited:
It would be cool if you guys posted your current plays or plays you are considering for Ichimoku Analysis 
CTJ,
I participate in indian markets cash section only.
I am still in the process of learning this system, hence can't comment on it to-day.
Anyway your explainations are a great help. Pl. keep it on.
Regards,
CNBONDRE
@ tradersky,
Go through the thread, understand the logic behind the method. If thousands of forex traders and regular day /swing traders use it, that just means the system works. You have to figure out how it works. Its just a tool. Your ability to use the tool will give you result. key word is, ability.
@camel,
I seen your method and you have taken it to a whole new level...
I trade options on Nifty only and Ichimuku helps a great deal in my speculation. Its the total picture of how things stand in terms of price valuations. My assumption is that price always comes back to the mean fair value (Kijun sen) after it goes to an excess or KS will move towards price and establish a new fair value.
I use the macd histogram to note divergence and stoch as a trigger. Apart from this, i use CCI & RSI for additional confirmation. I use double BB for volatility and ema to gauge the strength of the current trend. Apart from that, Fibonacci retracement gives me potential turning points.
As of today, the chart of Nifty looks like this...
Looking at the charts, i get the following information:
1. Fair Value (KS) is at 5029
2. strong support zone cloud is between 4989 to 4905.
3. short time fair value (TS) is at 5192 and as long as we havnt effected a close below this line we have to assume that traders will chase the price...
4. KS has gone flat from the last bar, meaning upward momentum has come to a halt and price is just floating in air. we will begin a sideways to a negative bias soon.
Now other confirmatory indicators tell me :
1. MACD histogram is showing divergence. Price making higher high, histo making lower high. Lower pivot low of histo broken, so time to exit long and go short.
2. Stoch is still in overbought zone and just broke the horizontal line.
My regular price chart gives me the following info :
1. Price is at the bottom of the bull channel (5385 to 5225)
2. EMA-34 is at 5075, so we can expect strong buying pressure to come from this level.
3. EMA-20 is at 5122, so first support will be around this level.
CCI panel tells me :
1. CCI-14 is trending for the past 16 bars.
2. CCI-14 is at 66, last pivot low was at 63, so a break of that is a invite to go short... LSMA is at 5282.
3. CCI-14 made a lower high while price made a higher high.
Fibonacci retracement :
1. 5136 is the 23.6% retracement
2. 5046 is 38% retracement
3. 4974 is 50% retracement
Conclusion :
We have a range expansion. We have established a top for the near term and we are looking for a new bottom. There is plenty of room on the downside as nearest retracement is 5136 or 5046. Ichi points to 5039 as the fair value.
Trade :
A bullish put spread :Bought 5100 put @ 72 and shorted double qty 5000 Put @ 51
expectations : Since this is a counter trend trade, we cannot short 5300 call as we can get trapped if the bulls return. We can retrace to 5130 or 5039 mark. And when the bottom is established, we book the 5100 put and let the 5000 put short die a natural death. If 4900 put gains sufficient meat, we eat that too... If we go sideways and KS pulls up, then the ratio spread will ensure we remain in profit. Drawback is, if the correction becomes deeper and 5039 is broken, then escape route is to go short on NF below the 5039 mark...to retain the 5000 put's premium.
Go through the thread, understand the logic behind the method. If thousands of forex traders and regular day /swing traders use it, that just means the system works. You have to figure out how it works. Its just a tool. Your ability to use the tool will give you result. key word is, ability.
It would be cool if you guys posted your current plays or plays you are considering for Ichimoku Analysis
I seen your method and you have taken it to a whole new level...
I trade options on Nifty only and Ichimuku helps a great deal in my speculation. Its the total picture of how things stand in terms of price valuations. My assumption is that price always comes back to the mean fair value (Kijun sen) after it goes to an excess or KS will move towards price and establish a new fair value.
I use the macd histogram to note divergence and stoch as a trigger. Apart from this, i use CCI & RSI for additional confirmation. I use double BB for volatility and ema to gauge the strength of the current trend. Apart from that, Fibonacci retracement gives me potential turning points.
As of today, the chart of Nifty looks like this...
Looking at the charts, i get the following information:
1. Fair Value (KS) is at 5029
2. strong support zone cloud is between 4989 to 4905.
3. short time fair value (TS) is at 5192 and as long as we havnt effected a close below this line we have to assume that traders will chase the price...
4. KS has gone flat from the last bar, meaning upward momentum has come to a halt and price is just floating in air. we will begin a sideways to a negative bias soon.
Now other confirmatory indicators tell me :
1. MACD histogram is showing divergence. Price making higher high, histo making lower high. Lower pivot low of histo broken, so time to exit long and go short.
2. Stoch is still in overbought zone and just broke the horizontal line.
My regular price chart gives me the following info :
1. Price is at the bottom of the bull channel (5385 to 5225)
2. EMA-34 is at 5075, so we can expect strong buying pressure to come from this level.
3. EMA-20 is at 5122, so first support will be around this level.
CCI panel tells me :
1. CCI-14 is trending for the past 16 bars.
2. CCI-14 is at 66, last pivot low was at 63, so a break of that is a invite to go short... LSMA is at 5282.
3. CCI-14 made a lower high while price made a higher high.
Fibonacci retracement :
1. 5136 is the 23.6% retracement
2. 5046 is 38% retracement
3. 4974 is 50% retracement
Conclusion :
We have a range expansion. We have established a top for the near term and we are looking for a new bottom. There is plenty of room on the downside as nearest retracement is 5136 or 5046. Ichi points to 5039 as the fair value.
Trade :
A bullish put spread :Bought 5100 put @ 72 and shorted double qty 5000 Put @ 51
expectations : Since this is a counter trend trade, we cannot short 5300 call as we can get trapped if the bulls return. We can retrace to 5130 or 5039 mark. And when the bottom is established, we book the 5100 put and let the 5000 put short die a natural death. If 4900 put gains sufficient meat, we eat that too... If we go sideways and KS pulls up, then the ratio spread will ensure we remain in profit. Drawback is, if the correction becomes deeper and 5039 is broken, then escape route is to go short on NF below the 5039 mark...to retain the 5000 put's premium.
@ tradersky,
Go through the thread, understand the logic behind the method. If thousands of forex traders and regular day /swing traders use it, that just means the system works. You have to figure out how it works. Its just a tool. Your ability to use the tool will give you result. key word is, ability.
@camel,
I seen your method and you have taken it to a whole new level...
I trade options on Nifty only and Ichimuku helps a great deal in my speculation. Its the total picture of how things stand in terms of price valuations. My assumption is that price always comes back to the mean fair value (Kijun sen) after it goes to an excess or KS will move towards price and establish a new fair value.
I use the macd histogram to note divergence and stoch as a trigger. Apart from this, i use CCI & RSI for additional confirmation. I use double BB for volatility and ema to gauge the strength of the current trend. Apart from that, Fibonacci retracement gives me potential turning points.
As of today, the chart of Nifty looks like this...
Looking at the charts, i get the following information:
1. Fair Value (KS) is at 5029
2. strong support zone cloud is between 4989 to 4905.
3. short time fair value (TS) is at 5192 and as long as we havnt effected a close below this line we have to assume that traders will chase the price...
4. KS has gone flat from the last bar, meaning upward momentum has come to a halt and price is just floating in air. we will begin a sideways to a negative bias soon.
Now other confirmatory indicators tell me :
1. MACD histogram is showing divergence. Price making higher high, histo making lower high. Lower pivot low of histo broken, so time to exit long and go short.
2. Stoch is still in overbought zone and just broke the horizontal line.
My regular price chart gives me the following info :
1. Price is at the bottom of the bull channel (5385 to 5225)
2. EMA-34 is at 5075, so we can expect strong buying pressure to come from this level.
3. EMA-20 is at 5122, so first support will be around this level.
CCI panel tells me :
1. CCI-14 is trending for the past 16 bars.
2. CCI-14 is at 66, last pivot low was at 63, so a break of that is a invite to go short... LSMA is at 5282.
3. CCI-14 made a lower high while price made a higher high.
Fibonacci retracement :
1. 5136 is the 23.6% retracement
2. 5046 is 38% retracement
3. 4974 is 50% retracement
Conclusion :
We have a range expansion. We have established a top for the near term and we are looking for a new bottom. There is plenty of room on the downside as nearest retracement is 5136 or 5046. Ichi points to 5039 as the fair value.
Trade :
A bullish put spread :Bought 5100 put @ 72 and shorted double qty 5000 Put @ 51
expectations : Since this is a counter trend trade, we cannot short 5300 call as we can get trapped if the bulls return. We can retrace to 5130 or 5039 mark. And when the bottom is established, we book the 5100 put and let the 5000 put short die a natural death. If 4900 put gains sufficient meat, we eat that too... If we go sideways and KS pulls up, then the ratio spread will ensure we remain in profit. Drawback is, if the correction becomes deeper and 5039 is broken, then escape route is to go short on NF below the 5039 mark...to retain the 5000 put's premium.
Go through the thread, understand the logic behind the method. If thousands of forex traders and regular day /swing traders use it, that just means the system works. You have to figure out how it works. Its just a tool. Your ability to use the tool will give you result. key word is, ability.
@camel,
I seen your method and you have taken it to a whole new level...
I trade options on Nifty only and Ichimuku helps a great deal in my speculation. Its the total picture of how things stand in terms of price valuations. My assumption is that price always comes back to the mean fair value (Kijun sen) after it goes to an excess or KS will move towards price and establish a new fair value.
I use the macd histogram to note divergence and stoch as a trigger. Apart from this, i use CCI & RSI for additional confirmation. I use double BB for volatility and ema to gauge the strength of the current trend. Apart from that, Fibonacci retracement gives me potential turning points.
As of today, the chart of Nifty looks like this...
Looking at the charts, i get the following information:
1. Fair Value (KS) is at 5029
2. strong support zone cloud is between 4989 to 4905.
3. short time fair value (TS) is at 5192 and as long as we havnt effected a close below this line we have to assume that traders will chase the price...
4. KS has gone flat from the last bar, meaning upward momentum has come to a halt and price is just floating in air. we will begin a sideways to a negative bias soon.
Now other confirmatory indicators tell me :
1. MACD histogram is showing divergence. Price making higher high, histo making lower high. Lower pivot low of histo broken, so time to exit long and go short.
2. Stoch is still in overbought zone and just broke the horizontal line.
My regular price chart gives me the following info :
1. Price is at the bottom of the bull channel (5385 to 5225)
2. EMA-34 is at 5075, so we can expect strong buying pressure to come from this level.
3. EMA-20 is at 5122, so first support will be around this level.
CCI panel tells me :
1. CCI-14 is trending for the past 16 bars.
2. CCI-14 is at 66, last pivot low was at 63, so a break of that is a invite to go short... LSMA is at 5282.
3. CCI-14 made a lower high while price made a higher high.
Fibonacci retracement :
1. 5136 is the 23.6% retracement
2. 5046 is 38% retracement
3. 4974 is 50% retracement
Conclusion :
We have a range expansion. We have established a top for the near term and we are looking for a new bottom. There is plenty of room on the downside as nearest retracement is 5136 or 5046. Ichi points to 5039 as the fair value.
Trade :
A bullish put spread :Bought 5100 put @ 72 and shorted double qty 5000 Put @ 51
expectations : Since this is a counter trend trade, we cannot short 5300 call as we can get trapped if the bulls return. We can retrace to 5130 or 5039 mark. And when the bottom is established, we book the 5100 put and let the 5000 put short die a natural death. If 4900 put gains sufficient meat, we eat that too... If we go sideways and KS pulls up, then the ratio spread will ensure we remain in profit. Drawback is, if the correction becomes deeper and 5039 is broken, then escape route is to go short on NF below the 5039 mark...to retain the 5000 put's premium.
The following is not to OPPOSE your judgement.
1) price is in strong uptrend (stochastics floating up in the air). So macd, CCI-14 will tend to give apparent -ve divergence (what is CCI 50 showing?).
2) CCI falling below 63 and price holding above corresponding low can be a 'hidden' bullish divergence.
I am very new to ichimiku charts and learning here.
Why is it necessary that KS will begin -ve bias soon. Are you judging from lookback period data?
regards,
vin
MACD and CCI are momentum indicators and they are showing that the second bullish mark up did not have enough thrust to take out previous indicator pivot highs. Momentum is still bullish and any trade south will be counter trend. Stoch is is not able to point the same thing, since its got a ceiling at 100. CCI-50 is at 83 and is very slow to react, so we ignore that for a counter trend trade.
Previous pivot low of cci-14 is 60, currently its at 63. LSMA is at 5282. SW is pointing towards a weak up trend. If tomorrow, CCI falls below the 60 mark and LSMA remains above close, then its a valid Vegas Trade to go short.
Hidden divergence are very prominent in MACD histogram and in trix.
CCI, stoch, macd, RSI, ROC, W%R are better at highlighting regular divergence.
KS is basically the mid point of the highest high and the lowest low of the last 26 bars. Since the highest high of the last 26 bars is 5282 and the lowest low value is 4777, the midpoint is 5029 which is the KS. Now 5282 is just 3 bars back, so KS will slowly shift up since the lowest low will shift upwards.
If 5282 is not broken in the coming 2 weeks then KS will be
5034.95 on 25th March
5039.63 on 26th March
5039.63 the day after
5039.63 the day after
5055.95 the day after
5055.95 the day after
5057.05 the day after
5057.05 the day after
5073.55 the day after
5124.47 the day after
5153.38 the day after
5166.10 the day after
If 5282 is broken in between, then the KS will only have a higher high value and will shift upwards only. It'll never give you a negative bias.
The beauty of this system is that it's a trend following system and will never give you a counter trend trade. It gives enough room for the price to retrace. It'll keep you in the trade till 50% retracement from the top is reached while constantly shifting your Stop loss upwards.
This is the secret why it captures 80% of the trend...
Previous pivot low of cci-14 is 60, currently its at 63. LSMA is at 5282. SW is pointing towards a weak up trend. If tomorrow, CCI falls below the 60 mark and LSMA remains above close, then its a valid Vegas Trade to go short.
Hidden divergence are very prominent in MACD histogram and in trix.
CCI, stoch, macd, RSI, ROC, W%R are better at highlighting regular divergence.
KS is basically the mid point of the highest high and the lowest low of the last 26 bars. Since the highest high of the last 26 bars is 5282 and the lowest low value is 4777, the midpoint is 5029 which is the KS. Now 5282 is just 3 bars back, so KS will slowly shift up since the lowest low will shift upwards.
If 5282 is not broken in the coming 2 weeks then KS will be
5034.95 on 25th March
5039.63 on 26th March
5039.63 the day after
5039.63 the day after
5055.95 the day after
5055.95 the day after
5057.05 the day after
5057.05 the day after
5073.55 the day after
5124.47 the day after
5153.38 the day after
5166.10 the day after
If 5282 is broken in between, then the KS will only have a higher high value and will shift upwards only. It'll never give you a negative bias.
The beauty of this system is that it's a trend following system and will never give you a counter trend trade. It gives enough room for the price to retrace. It'll keep you in the trade till 50% retracement from the top is reached while constantly shifting your Stop loss upwards.
This is the secret why it captures 80% of the trend...
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