I have been using Ichimoku n a renko chart along with fibonacci, some good results trading only breakouts
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Most liked posts in thread: Ichimoku discussion thread
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Someone mentioned these in another discussion just recently. I tried to find that post but couldn't. Anyway, I'd never heard of Ichimoku Clouds so did some late night youtube watching and I'm very interested. It really helps identify if a stock is in a trend and supposedly the strength of that trend.
I might use it to help validate buy signals and market condition (XAO). I bought a couple of stocks in the past few days that I got stopped out of fairly quickly and when I went back and checked them on the Ichimoku cloud it confirmed they were not in a clear trend (they were inside the cloud and not in clean air).
I also found tradingview.com which provides free web based charting with Ichinoko Cloud format with delayed live pricing, the ability to add watchlists and nice clean interface. I haven't really looked into it much beyond that. I also discovered that the web based charting program in Lincoln Indicators Stock Doctor also includes it.
I'd be interested to hear more from anyone who has been using them on a daily (EOD) basis and any observations.
ps: I haven't read through this thread yet. Will do so tonight.sptrawler likes this.
I've used them in the past, there isn't a lot of magic there if you look into how the lines are constructed.
Tenkan/Kijun Sen lines are the midpoint of 9/26 period high/low, i.e. same as the midpoint of Donchian channel of those lengths.
Senkou B is constructed similarly from the 52 period high/low and shifted forward on the chart in a similar but further shifted way to Bill Williams Alligator.
Chiku Span is same as the 26 period ROC or Momentum, but plotted as an overlay rather than separately as you'll see on Western technical analysis charts.
The 9,26,52 default parameters fit nicely into a weekly chart where 26w = 6m and 52w = 12m but that is not why they were originally chosen, and rather chosen for use on a daily chart. If you look up those original reasons (see below) you'll find it is probably wise to switch out those parameters/lagging.
I bet if I presented each line as an indicator below the chart you would think it was silly.
A lot of Japanese technical analysis traders use it and so you will often see, especially in JPY crosses on FX markets and on the Nikkei index that the price will trade off the lines.
EDIT: You saw some of your trades got stopped out because they were in the cloud, but if you trade off Ichimoku system triggers you will still find plenty of "clear sky" trades that get stopped out. That is just the nature of trend following.Last edited: Sep 11, 2019
A 'technique' is only a technique when it can be matched up with the appropriate sell signals and backtested profitably. Without that it's nothing. Whether it looks nice on the chart, whether it takes 10 lines or 10000 lines of code.... such things have no relevance.
The very first day I looked at a chart, I plotted a parabolic SAR and thought to myself, 'how good is this!'. Optical illusion. No individual indicator can be traded in isolation. If you use several of them to create a system, maybe you can find some good entries. Then you have to work out how/when to sell.
Here is the first....
This is the daily EUR/CHF.
Price is above the Kumo cloud.
The Chikou Span is above the price in the past.
The Tenkan-sen is above the Kijun-sen.
The Kumo cloud in the future has turned Bullish (green).
I have used the Kijun-sen as the initial stop loss (red horizontal line) but the top of the current bearish Kumo is a straight line which should be strong support so maybe I should have used that? (see the two days that tried to peirce it then got turned back up! Also looks like an area of previous resistance which has now turned into a support line...)
An earlier entry after the second bounce off the Kumo would have been better but I didn't get to it in time. This is another point that I'm interested in. If you miss the breakout of the Kumo, would you still get into the trade at a later time and how? Randomly jump in? Use Stochastics or another oscillator to get in on a pullback? I have put on a standard Parabolic SAR to look at past breakouts and they seem to present good opportunities with the cross above/below the SAR to get into a missed trade (but hindsight is always a great thing isn't it)
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Here is the daily AUS/USD with the same setup as before.
I think I need to chuck in here that this is not financial advice and I'm not a fincancial advisor (far from it!). I'm only paper trading this with a demo account for now.
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I think it would also be useful to post the losers too so maybe someone can help me analyse why they are losers!
Here is the EUR/GBP. I entered at the start (top) of the thin red candle (it wasn't a long red candle at the time!) I got stopped out when price dropped below the Kijun-sen.
Looking at what I probably did wrong, I entered too late after the break through the Kumo. This may answer my previous question of getting in after missing the trade. Should I have waited for a retracement then another entry after price climbed back above the Kijun-sen (or both the Kijun-sen and Tenkan sen?)?
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And here is the EUR/JPY.
I probably got into this one too late also but took it anyway. A better entry would have been the intial break or straight after the retracement. An oscillator or SAR might have shown the late entry after the retracement?...
Another thing I'd like to point out is, notice the two previous breaks? They both would have been losers even though trade setups were good in both cases! This entry/exit method could be subject to alot of whipsaws and that is where the money management and living to trade another day thing comes in I suppose. I am using 1 % to determine my trade sizes so its $1000 losers (on the OandA demo account) hopefully there will be some big winners too!
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Here is the EUR/JPY with a SAR and Stochastics added to it. They both provided an entry after the retracement at the same spot. Using a retracement entry might stop some false breakouts but you could also miss out completely if there is no pullback
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The indicator itself is multifaceted . it outlines trend along with support and resistance levels as well as entry signals if used correctly . The main lines are much the same as MACD , but when used in conjunction with another chart using western style indicators is where it excels . The price action and the Kumo ( cloud ) are the signals most looked at when in bull mode ( price above cloud ) etc., yet the crossings can be effective in trend reversal and position shifts , be they long term , where it again excels or for the short term movements .
What indicators do you use with the Ichimoku?
I start with all the MA's , inclusive of the 89 day MA . and proceed from there . Confirmation is the goal , not always achievable though , and it takes a little more watching and waiting for the signals to inspire action equal to the opportunities that may show themselves .
Compare a plain chart and an Ichimoku chart.
Ickimoku gives you a road map to find your way........
I use it for short term trading on 15/30/1hr/4hr charts.
Some recent trades were outlined on the Gold threads
The IchiWiki appears to be working again............
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