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.
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).
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.
The most strong signals for this indicator were observed on W1, D1 and H1 timeframes as the following:
- the price curve is crossing the Senkou Span B line breaking this resistance line;
- Chinkou Span line signals;
- 3 line signal (Tenkan-sen, Kijun-sen and Senkou Span B lines are going in horizontal way above each other);
- gold and dead crosses.
We will describe everything about this indicator. Step by step. In the next few posts we will know how to select the T/P and S/L levels on different timeframes practically, how to minimize the risks and which settings of the indicator we must select for the different timeframes.
some people also look for price to break above kijun for entry
not sure of timeframe for this method either and if they use that along with other signals from ichim
I think they are using all the signals together. As many as possible to minimize the risk. And they are waiting untill receive all the confirmation. But it is too late sometimes. Because very faint signal is coming the first, and then the more stronger signals are coming. I will try to describe everything that I know about time frame and settings of this indicator tomorrow. But may say that people are using not D1 only. H1 is very popular as well. Somebody said even about m5!
But D1 and H1 are more popular timeframe.
here are some settings which i havent had time to test as you said this method was created on a different trading time scale.
Tenkan Sen = 7 Periods
Senkou (clouds) = 44
Many people understand the good trading systems as a profitability. Yes it is true. But Ishimoku indicator is the reliable system.
Ok. Thus how to estimate the stop loss and profit level? It is very important when we are working with this indicator as with a system to have 1 or 2 profit levels and one stop level.
There are 4 ways to estimate S/L levels.
First one is the technical method for S/L. It is for H1 timeframe only:
15 - 30 p on eur;
20 - 30 on gbp;
35 - 50 on jpy;
30 - 80 on chf.
The second method is mostly for D1 and W1 timeframe.
In this case we may estimate S/L using the cloud (behind the cloud) and something else (some strong support level of the indicator for example). And we will have S/L as big as 200 p (on W1) and 100-150 (on D1).
If we want to estimate S/L by the second method on H1 timeframe, we probably will have 40 - 50 on eur, 50 - 60 on gbp, 70 - 100 on chf and 60 - 90 on jpy.