Ichimoku

To add comments, please log in or register
Sergey Golubev
Moderator
118461
Sergey Golubev  

I started to test some Ishimoku EA and suddenly recognized that it is necessary to have more information about it.

Thus we start this thread.

I will try to post everything about Ishimoku indicator here.

Sergey Golubev
Moderator
118461
Sergey Golubev  

The space between Senkou lines is the cloud.

And we have 3 cases:

- if the price is inside the cloud (it means it is between Senkou lines) we have non trading market. In other words, we are not trading inside the cloud.

And Senkou lines are the support and resistance lines in this case.

- if the price is above the cloud the first Senkou line is the first support, and the second one is the second support respectively.

- if the price is below the cloud the first line (first from the price line) is the first resistance and the second one is the second resistance.

Sergey Golubev
Moderator
118461
Sergey Golubev  

If Chinkou Span line is crossing the price curve from below to upward we have the signal to buy, and from above to below - signal to sell.

Sergey Golubev
Moderator
118461
Sergey Golubev  

Kijun-sen is used as market trend indicator line (main line):

- if the price is above Kijun-sen line we have uptrend (most probably);

- if the price curve is crossing the Kijun-sen line the trend will be reversed (most probably as well).

Sergey Golubev
Moderator
118461
Sergey Golubev  

Tenkan-sen line is crossing Kijun-sen line:

- from up to down - sell signal;

- from down to up - buy signal.

Sergey Golubev
Moderator
118461
Sergey Golubev  

Thus, the Ishimoku indicator looks like trading system: all the lines are the middle of the price range for the some period of time and we may estimate the bullish and bearish trend and so on. And all the lines are re-acted instantly on the creating the new max or minimum within period of time - no delay.

In other words the Ishimoru indicator is of the complex trading system.

Sergey Golubev
Moderator
118461
Sergey Golubev  

But anyway there are many people who are using this indicator with some good results. And they are using exactly default settings (9, 26, 52).

On the next few posts we will describe more about it but I want to say that if you are trading using Ishimoru indicator you will have 1 trade for 2 weeks on D1 or 1 trade per 2 days in intra-day trading. And most probably you will be in profit in 4 of 5 cases (it means 75%).

Sergey Golubev
Moderator
118461
Sergey Golubev  

We said above that if Chinkou Span line is crossing the price curve from down to upward we have the signal to buy, and from up to down - signal to sell. But this Chinkou Span line should cross the line not in horizontal way. It should be at angle (45 or above is the ideal crossing).

Besides we mentioned about Tenkan-sen line is crossing Kijun-sen lines crossing: Tenkan-sen is crossing Kijun-sen from down to up - signal to buy (Gold Cross), sell signal is called as Dead Cross.

If the price curve crossed the Senkou Span B line (price candle should be closed before the line) we may open the order on the direction of the trend. But only in the case if Tenkan-sen line is not on horizontal level.

If Tenkan-sen line is on horizontal level - we have afloat market. We are not trading in this case.

And if we have Tenkan-sen, Kijun-sen and Senkou Span B lines are going in horizontal way above each other - it is reversed point. It means the price will change the direction soon.

If the price is inside the cloud together with horizontal Tenkan-sen - afloat market. Most of us will not trade in this case but some people are trying to trade inside the cloude understanding the cloud as the channel. It is possible only if the channel (cloud) is big enough.

Sergey Golubev
Moderator
118461
Sergey Golubev  

So we have the signals to enter. But it is very important to exit in right way: T/P and S/L.

If we enter (open the order) on the direction to the cloud so most probably we will have 2 levels of T/P which are the Senkou Span A and Senkou Span B lines. S/L (stop loss levels) we will estimate using some other indicators.

If we are trading on the direction from the cloud the Senkou Span A and Senkou Span B lines will be stop loss levels (together with Kijun-sen line). In this case the profit level (T/P) will be in the place where Tenkan-sen line is changing the direction, or in some other place according to our evaluation.

It is necessary to say that Ishimoku indicator is using in candlestick charts and we are not trading in case of contradiction with candle analysis.

Sergey Golubev
Moderator
118461
Sergey Golubev  

If the cloud was changed the color ( if the Senkou Span A and Senkou Span B lines were interchanged) we have the sign that the direction of the trend will be changed soon (will be reversed soon).

Sergey Golubev
Moderator
118461
Sergey Golubev  

To trade inside the cloud (which should be big enoung) we are using Tenkan-sen line following the direction of the line and trading using Chinkou Span line signals: if Chinkou Span line is crossing the price curve from below to upward we have the signal to buy, and from above to below - signal to sell. In this case we will have stop loss levels out of cloud and profit levels will be the borders of the cloud. Thus, we enter using Chinkou Span, we have S/L levels somewhere outside the cloud, we have prit levels which are of the borders of the cloud. Or we may exit if Tenkan-sen line was changed the direction; if we have an other Chinkou Span line signal; if the price is crossing the one of the cloud lines.