ichimok2005 - expert for MetaTrader 5
The EA trades based on the signals of iIchimoku
(Ichimoku Kinko Hyo) using a fixed lot. When a signal emerges, opposite positions are closed.
Forum on trading, automated trading systems and testing trading
Simple Ichimoku System - rules for the
Sergey Golubev, 2010.03.03 08:36
Description of the indicator.
Lines of the indicator:
- Senkou Span A;
- Senkou Span B;
- Chinkou Span.
The space between Senkou lines is the cloud. If the price is located between Senkou Span A and Senkou Span B lines (inside this
cloud) so the market is ranging (if the cloud is big enough) or flat (if the cloud is small). In this case Senkou Span A and Senkou
Span B lines are support and resistance lines.
If the price is inside the cloud and - Tenkan-sen and/or Kijun-sen lines are located in almost horizintal way so Ichimoku
Sanjin suggested to use some other indicators to estimate the future of the price movement.
By the way - some traders are using Tenkan-sen and Kijun-sen lines (located in almost horizontal way, or at some angle of) to
estimate the future possible trend strength. And they are using those Tenkan-sen and Kijun-sen lines only to predict the
direction and the strength of the possible trend in the future. Just to be ready.
If the price is above the cloud so Senkou Span A and Senkou Span B are the first and second support lines. If the price is below the
cloud so Senkou Span A and Senkou Span B are the first and second resistance lines.
Some traders said that if the cloud was/will be changed by color (you can see it from the image) - so it indicating the changing the
trend in that future period of time.
Span line is crossing the price so it is the signal to enter (for buy or for sell). It is most strongest signal in this
indicator. But this signal to enter is coming late sometimes so it is necessary to look at the other indicator' lines for
confirmation. Please note: Chinkou Span line should cross the price on the closed/previous candle and no in horizontal way
(it should be at angle of at least 45 degrees). Besides, this crossing should be done for candle chart as for line chart too.
By the way - this Simple Ichimoku System is ystem to trade on closed/previous bar rule: eery crossing, every signal and every
estimation/ealuation of every indicator of this system should be considered in closed/previous candle.
Kijun-sen is the main line for trend in this indicator. If the price is above Kijun-sen line so, most proably, the uptrend will be
continuing. If the price is crossing Kijun-sen so, most probably, the trend will be changed soon.
Tenkan-sen is reversal line: if this line is on uptrend or on downtrend - it indicates the trending market (uptrend or downtrend
respectively). If Tenkan-sen line is going on almost horizontal way - it id flat (ot ranging) - price is inside the channel
between 2 support/resistance lines which is near each other.
Some people are using Tenkan-sen/Kijun-sen crossing as the signals for buy or sell. But to say the true - this kind of crossing can
not be strng and having many false signals. So, every cross or every Ichimoku signal should be conformed by the other
indicator's lines or other indicator's signals (to increase the probability for good entry to the market).
There are some more complicated rules for Ichimoku indicator: trading based on and Senkou Span lines. Those rules are based on
the location of those lines concerning each other and estimating the enter to the market on the direction of Tenkan-sen or
Kijun-sen line. I will not decribe those very specific way of trading as we are not using it in this system.
And there are some other complicated rules which we are not using here. It is the following: all the lines (Tenkan-sen,
Kijun-sen, Senkou Span A, Senkou Span B, Chinkou Span) are used in the same way as Moing Averages indicators crossing with
different period of the indicators. And traders are uing it together with Fibo and candle analysis and having very good
results. But we are not uing this trading method in this system.
Any indicator's line is immediately re-act on the new extremum created. Besides, if we can see - Chinkou Span line is similar
with Momuntum indicator by meaning. Thus, we are gaving in this 1 indicator:
- multiplied signals to enter to the market
- support/resistance lines and prediction of the support/resistance ituation in the future;
- direction of the market, market condition evaluation, and predition on the future;
and so on.
And it is just 1 indicator only acted as complex trading system. Some people can not believe but it is the real true: this
indicator was finally created by 1 Japanese newspaper writer in Tokyo before World War II. But ... I can say more: the general
concept for this indicator was invented in Japan in 18 century by one of Japanese mathematician, and Ichimoku Sanjin just
continued this research. And for now - we are having one of the most powerful tool for trading with 70% of the probability of the
winning trades. Just 1 indicator created in the beginning of 20 century based on the research which was done in 18 century in