Excellent strategy. Thanks for the teaching. Will be learning more from you on your website and u-tube channel. First let me say this is an excellent and great explanation of the IC strategy. am I cross-eyed from reading too long on my phone or do you have an error in the below paragraph? Shouldn't the second sentence read When leading A is above leading Span B?

If I am wrong I apologise for wasting your time. I am new to trading but trying to soak up as much information as I can. Hi, thank you so much for your kindly explaination for this cloud strategy, I more understand it after I read your article than other's article.

Please, I have a question, if we use this strategy on hourly data, should we wait for the same pattern occur on 4 hour data too in order to make an entry point? Or we just look for the entry point pattern at hourly data only? Thank you for your explaination. Hey, i really appreciate everything you guys have done and all the time and effort you put in to helping us.

My only question is, what currency pairs work best with this strategy? Hi, Thanks a lot for this strategy. it's very well explained but I have a small doubt about which timeframe data is best to use for this strategy like Seconds data or Hourly data or Daily data.

I implementing this strategy on Hourly data but do I need to take seconds data for this Step 3 Buy after the crossover at the opening of the next candle. I found the longer the timeframe the more accurate the entry. But if you are using the 1H timeframe and above, you will need a lot of patience and don't enter trades blindly or rush into it.

I personally use 15m and it works great also. What do you use as your stop-loss for the lower time frame trades? the guide emphasizes cloud breakout, but most intraday trades are already well above the cloud breakout. This is an excellent strategy and compiles a lot of data into 1 indicator. That's great! I have a question about buying. If the crossover of Conventional Line above the Base Line happens below the Ichimoku Cloud and price is still below the Ichimoku Cloud, when would you buy?

Would you buy as soon as price breaks above the Ichimoku Cloud, so long as the Conventional Line stays above the Base Line?

Thanks so much for the insight! first off thanks for your kind words. It means alot to see that people like you are loving this content.

You would buy when price has broke above, like you said. Ichimoku trading strategy has everything you need to trade successfully. From identifying support and resistance levels to clearly identifying trends irrespective of the timeframe. I request you to send a PDF copy for detailed and internalization. Thank you for explaining this awesome strategy, but i have 1 question. In the sell example, the crossover already took place before or at the same time the candle broke trough the cloud, but you did not take the trade and waited for the next crossover.

when i understand this right, then i have to wait for the crossover, after the candle broke trough the cloud, right? Can you explain why in the sell example you have to wait? The candle broke and closed below the cloud.

The baseline was already over the conversion line. You are proposing waiting and letting the Conversion line cross over the baseline and then the baseline cross back over the conversion line. Has it been your experience that when the candle breaks the cloud and the baseline is already over the conversion line there will be a retrace?

This allows the conversion line and the baseline swap back and forth? Please explain I love this system and want to learn. I think that's correct, they are trying to avoid the case of a STRONG retrace where it would swing back and easily hit any SL. You can enter the trade if you wish but I think their strategy of waiting will filter out a lot of false signal in the long run. Hope this helps. This step-by-step guide will show you an easy way to trade with the MACD indicator.

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Best Ichimoku Strategy for Quick Profits by TradingStrategyGuides Last updated Feb 19, All Strategies , Forex Basics , Forex Strategies , Indicator Strategies , Indicators 58 comments. Table of Contents hide. KT says:. October 17, at pm. Sid Cormier says:. September 14, at pm. Musa Kajang says:. September 8, at pm. Jamil Abdul Rauf says:. July 30, at am. Aseem kumar dubey says:. April 23, at am. Rishi Jain says:. December 28, at pm. R says:. October 30, at pm.

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Again, an intelligent trader should mainly look for further confirmation to bias the negatives into his sides. Wrong signals can occur, but a number of positive signals are somehow enough to provide forex trading with an edge.

The ability to explain and to understand Ichimoku signs should be generated at a particular time. It may also get complementing this tool with another indicator that is necessary for more potential and confirm shift change. MetaTrader Ichimoku Setting is a simple Ichimoku trading system.

Forex trading is targeted on the Ichimoku prime factors of reference that are while the multiple components divide. There is a quality of data available; before said, the conservative traders wait for costing candlestick to crack free from the other line and the Cloud. Technical analysis should be created based on past pricing attitudes and the number of chances to forecast future costs. On the other hand, previous results do not guarantee future results. The green circle shows optimal entry points, and the red process shows equal exits, which should be picked out using Ichimoku charts analysis records.

Longer timeframes help to delete market voice and raise the effectiveness of the technical support tool. In these points, steps 2 and 3 show money management and prudent risks principles which should be employed. Must remember that the previous years are not providing a guarantee for the future. Therefore, consistency should be your target, and hopefully, Ichimoku Technical Analysis will offer an edge. Ichimoku Cloud recommended a bullish shift while candles are above the Cloud. While the cloud changes from red to green, which means the candle moves upward from the kijun baseline.

And the tenken line moves above the baseline. An indicator is nodding that the exchange should be converting to bullish. On the other hand, Ichimoku Cloud recommended a bearish shift while the candle is situated below the Cloud. While the cloud changes from blue to red, the candle shits below.

The Tenkan conversion and the Kijun baseline below the bass signals. This means the indicator is showing that the market is going to receive the bearish. However, experienced traders join Ichimoku Cloud with more other hands for correct analysis.

Therefore it should be used on its own. Various brokers provide this tool to their clients. This indicator may also come with MetaTrader 4. It is used for checking the behaviour of the market whether it will go up or fall down. Follow the given below steps for setting up Ichimoku Cloud properly at your broker platform.

There are five elements, and each one consists of a different type of moving average. First, the standard line Kijun red and the conversion line Tenkan Blue are equilibrium lines. The Tenkan blue average the highest hike and the lowest fall till the last nine intervals.

It will show that the signals are shifting reversal while crossing the standard line Kijun red. Comparatively, the Kijun line average is the lowest and the highest value for the previous 26 intervals.

Thus, it provides dynamic resistance and support levels. Senkou Span A and Senkou Span B are the second pair of the moving average from the well-known Cloud. An average of double equilibrium lines and trend the derived value of period move forward should be determined by Senkou Span A. On the other side, Senkou Span B calculate the average lower low and the highest high for the previous 52 intervals, moving the result 26 interval forward. In the middle of Senkou Span A and Senkou Span B, create a shaded portion on the chart.

That shaded area is known as the Cloud, which converts from red to green and opposite every single time these boundaries cross each other. While the cloud changes into green, the market sentiments are meant to be bullish. Alternatively, when the colour changes into red, market sentiments are intended to be bearish. Must note that the Cloud converts its colour while the shift reversal can happen quickly.

The straight direction among the borders of the Cloud should offer an indicator of market volatility. At last, the Chikou Span green-coloured line shows the closing costs of the current candle, which is a trend back by 26 intervals. This lagging running average provides proof for confirming other signals getting from the other indicators.

The chart consists of three indicators in a single and provides a filtered reach to the cost action for the currency investors. It may also enhance trade in the forex market and control the isolating the correct momentum play. Some brokers who provide Ichimoku Cloud are ETFinance.

The most preferred time frame is H1. However, the Ichimoku Cloud setting remains the default for Kijun-Sen, 9 for Tenkan Sen, 52 for Senkou Span B. The Ichimoku Cloud is a group of technical indicators that represent resistance and support and trend and momentum direction.

Yes, It is pretty trustworthy because the Ichimoku cloud is automatically designed to select momentum and direction to help you in buying and selling decisions. If you prefer long-time trading, you can check the Ichimoku charts on a weekly and daily basis.

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There are many resources where you can find information on using and trading with traditional western methods. However, it seems there is not as much material written on some of the more popular eastern trading techniques.

So in this lesson, we will take a closer look at the Ichimoku Cloud, a somewhat mysterious chart indicator, favored among many Japanese traders. We will start our discussion with what the Ichimoiku cloud is, and then move into learning about how it is calculated and plotted, and finally I will present some practical strategies for trading with it.

The Ichimoku cloud indicator is also sometimes referred to as Ichimoku Kinko Hyo or Kumo Cloud. It is a stripped down chart; we can clearly see that the price action is moving along in a bearish trend.

There the three Moving Average lines — red, blue, and green. You also see the Cloud, which consists of the orange area on the chart. Although it looks quite chaotic to the untrained eye, to the Ichimoku trader, there is clarity within the chart. So, as you can see from the Ichimoku chart above, there are three lines and the Cloud.

Since the Cloud is formed by an upper and a lower level, we have a total of 5 lines on the chart. Each of these lines has Moving Average functions, and the lines do take into consideration past data from a certain number of periods on the chart, but there are also some distinct differences between the Ichimoku and the standard SMA, or EMA.

The default parameters of the Ichimoku tool are 9, 26, The following explanation regarding the structure of each line will move you closer towards understanding how the Ichimoku is constructed.

The green line on the Ichimoku Indicator is called a Chinoku Span. If you have a look at the green plotted line on our chart above, you will notice that the green Chinoku Span mimics the price action of the currency pair. However, the line is displaced to the left by 26 periods. In this manner, the Chinoku Span line is a displaced lagging component within the Kumo Cloud structure. The Tenkan Sen is the red line on the Ichimoku Indicator.

This line has Moving Average functions as well. It takes into consideration the highest and the lowest points on the chart for a 9 period time frame. The blue line of the Ichimoku Cloud is called Kijun Sen. This line has absolutely identical functions as the red Tenkan Sen. The only difference is that the Kijun Sen considers 26 periods instead of 9.

The blue Kijun Sen creates a mid value between the highest and the lowest period on the chart, among the last 26 periods. Since the Kijun Sen takes more periods into consideration than the Tenkan Sen, it is slower and it reacts later to price moves.

As we said, the Cloud is the orange area on this Metatrader chart illustrated above. Notice that it is formed by an upper and a lower level, consisting of two lines. The first line forming the Cloud averages the highs and the lows of the Kijun Sen and the Tenkan Sen.

Also, the line is displaced 26 periods forward to the right. The other line of the Cloud shows a midpoint of the highs and the lows on the graph for a 52 period timeframe. As with the other line of the Cloud, this line is also displaced by 26 periods to the right. These two lines constantly interact with each other. Furthermore, since there is an equal displacement, it tends to keep the two lines in close proximity of each other.

Now that we are familiar with the structure of the cloud chart, we will now go through some Ichimoku trading signals. The usage of a stop loss when trading with Ichimoku is recommended, so that you will be protected from any rapid price moves in the opposite direction. For Ichimoku style trading, we will want to use the lines of the indicator to close our trades rather than using fixed targets or trailing stop loss orders. In this Ichimoku Clouds trading strategy we will enter the market when the price breaks out of the Cloud.

We will enter in the direction of the breakout, attempting to catch a trend. When the price starts trending in our favor, we will continue to stay in the trade until the price action breaks the blue Kijun Sen in the opposite direction.

Below you will see the way this trading strategy works:. The image shows a classic downtrend, which could be traded using this Ichimoku pattern setup. The chart begins with the price action moving below the orange Cloud. This gives a sell signal on the chart and an Ichimoku trader would be looking to short the Cable. See that the price enters a bearish trend afterwards.

The decrease is relatively sharp. However, the price finds resistance at the blue line and continues its downward direction. The black arrows on the chart show the moments when the price tests the Kijun Sen as a resistance. Since the breakout attempts proved unsuccessful, the short trade should be held further. This creates an exit signal on the chart. As a result, the short trade should be closed on the candle that closes above the blue Ichimoku line.

In this Ichimoku Cloud trading method we will enter the market when the price breaks the Cloud. We will trade the Forex pair in the direction of the Cloud breakout trying to ride a trend. After the price starts trending in our direction we will hold the trade until the green Chinoku Span breaks the red Tenkan Sen.

This is how it works:. The Ichimoku indicator is also attached to our graph. The chart image starts with the price breaking out of the Cloud in a bullish direction.

The green circle shows the moment when the price closes a candle above the Cloud. As you see, the price starts trending upwards shortly afterwards. Now we need to follow the green Chinoku Span.

See that it starts trending upwards after the price action. During the upwards price move the green Chinoku Span gains relative distance from the price action. This confirms the strength of the bullish trend. One week after the buy signal on the chart and the continuous uptrend, the price creates a top and starts a sharp decline. This reflects the move of the green Chinoku Span.

After the establishment of the top, the price decreases enough to bring the green Chinoku line through the red Tenkan Sen. According to our strategy this is the close signal and the long trade should be exited at this time. In the pure cloud technique, we will only use the Cloud for our Ichimoku Analysis. We will enter the market when the price breaks the Cloud. Our trade will be in the direction of the breakout. We will stay in the trade until the price move into the Cloud again and breaks it at the opposite level.

The image shows that the price is in a down trend. We will implement the Ichimoku Cloud trading rules we just described for this example. The image starts with the price switching above the Cloud and then quickly back below the Cloud. As you see, the price starts decreasing afterwards. After the pair reaches a bottom, it starts consolidating, and then starts moving upwards, back into the Cloud.

After a short hesitation in and out of the Cloud from the lower side, the price action breaks the Cloud in a bullish direction. This creates a very strong new long signal and a short exit signal on the chart as well. The short trade should be closed out when the price action closes a candle above the Cloud. You will notice that the Cloud is the most lagging component of the Ichimoku trading tool. As a result, this strategy is very successful when the Forex pair is trending, but on the other hand, it can give you many false signals when the pair is consolidating.

During ranges you will often see the price hopping above and below the Cloud creating a whipsawing effect with many false signals. Take note that in these three trading strategies we only used the Ichimoku Cloud indicator and nothing else.

Many traders, especially those based in Japan and other Eastern counties rely heavily or exclusively on this trading indicator for their trade analysis. Also, you may have noticed that we used the Cloud component in each of our three trading strategies. This is so because the Cloud is the most important part of the Ichimoku indicator. The Cloud is typically used to open trades when trading with Ichimoku. The Kumo Cloud tool is fully customizable.

You can always remove and add components of the cloud indicator in order to best suit your trading style. If you are trading using the Cloud strategy, your Ichimoku indicator could be setup to look the following way:. In this chart image you see that we only have the Cloud as part of the Ichimoku indicator. We have removed the Kijun Sen, the Tenkan Sen, and the Chinoku Span. If you prefer trading using just the cloud, then this chart template would provide a better visual to guide your trading.

The same applies for the other two strategies we discussed earlier. If you trade using the Cloud and the blue Kijun Sen, your chart could be setup to look the following way:. Note we have also added the blue Kijun Sen to the cloud in order to adapt the Ichimoku Cloud chart to our trading strategy.

And so, the red Tenkan Sen and the green Chinoku Span are not plotted in this example. This time the Kijun Sen is gone. At the same time, we have added the red Tenkan Sen and the Chinoku Span.

com Review Capitalix Review Menu. Here, the cloud is a product of the range-bound scenario over the first four months and stands as a significant support and resistance barrier. And the tenken line moves above the baseline. It is new to the mainstream but has been rising in popularity among novice and experienced traders. April 25, at am. Because many of the lines on the Ichimoku Cloud chart are created using averages, the chart is often compared to a simple moving average chart.

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