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Thread: Ichimoku Trading System

  1. #1
    Join Date
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    Default Ichimoku Trading System

    I have been a regular to babypips from quiet some time and have learnt a great deal from all of you.

    I have been trading currencies for past 4 years. It has been a very rewarding experience for me emotionally as well as financially.

    I would like to share with you all, a great trading system I have been using.

    Kinko Hyo has always been a great visual guide to the market for the traders.
    I shall not go into the great details of ichimoku. You can use IchiWiki to see how the ichimoku is constructed. Here, I try to explain the system I have been using with great success for past 2 years.

    Success in trading comes to those, who are patient and wait for the right price at the right time to enter a position.
    The trading system, am explaing here requires you to wait for "right price at the right time"

    Rewards are great, if you learn to be patient. This system can make you thousands of pips in a month. You just have to wait for the right time.

    Success rate is about 90% (may be more, there are hardly any losing trades!!).

    I use this system only on Daily Charts. (May be it works on hourly but I haven't tried).

    So, here it goes:

    Pair: Any currency pair.

    Time Period: Daily (I use GMT for market open/close)

    Tenkan Sen : Green

    Kijun Sen : Red

    Chikou Span (Lagging Line) : Purple

    Cloud : Blue

    Entry Signal:

    To SELL:

    Condition 1: Tenkan Sen below Kijun Sen.
    Condition 2: Chikou Span below the Price Line.
    Condition 3: Current Price below the Cloud.

    To BUY:

    Condition 1: Tenkan Sen above Kijun Sen.
    Condition 2: Chikou Span above the Price Line.
    Condition 3: Current Price above the Cloud.

    As soon as ALL 3 conditions are satisfied, enter into the position at the open of next candle. Use 2 lots to enter the position.

    EXIT:

    To exit, we use Chikou Span (the lagging line).

    Mark supports and resistance on the Chikou Span line, just as you would do for the price line.

    For LONG position: The support on Chikou Span right below the price you enter is your STOP LOSS level.
    The resistance on Chikou Span right above the price you enter is your TAKE PROFIT level.
    And vice versa, for SHORT position.

    For example, in the chart attached, you can see 1.3985 as my profit target on EUR long position. And, 1.3600 is the stop loss level

    If your stop loss level is reached (which is very unlikwly), get out of your 2 lots.

    If you take profit level is reached, take out 1 lot and let the other lot run with a trailing stop loss.

    As you can see the EUR chart attached, after giving the ENTRY signal at 1.3712, the price after hitting first target of 1.3985, went as high as 1.4700

    Well, this is my simple trading system
    Everyday, I scan all the currency pairs for this formation on daily charts and enter a position with above mentioned rules.

    Only last week, I entered EUR/USD ; USD/CHF and an asian currency USD/SGD, all 3 pairs earning me thousands of pips in a matter of 2 days.

    I would appreciate any feedback or questions about this system
    Also any suggestions to improve the system are welcome.

    I have also started updating all trades that I enter based on Ichimoku Trading System on MeetPips.com — Private Beta and you can find me there with the user name Dealing Room.
    Attached Images Attached Images  
    Last edited by PipsyGirl; 09-03-2009 at 09:19 AM. Reason: Link Violation
    staroxman likes this.


  2. #2
    Fap
    Fap is offline
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    Default Very Interesting Post

    I'm fearly new to this forex tarding thing and have lots of problems understanding the terms that you use. I have found some helpful information around the forum but still need more guidance.

    Is there any suggestiong of a software or a program that would be helpful in making me a successful trader. I know I have the patience to do trading i just need the know how.

    Any help would be helpful.
    Last edited by PipsyGirl; 12-20-2008 at 04:10 PM. Reason: Link Violation

  3. #3
    Join Date
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    I suggest you go through the School on Baby Pips first.
    And regarding the terms I have used to explain the Ichimoku System, you can check the investopedia for the explanation of the terms used:
    Ichimoku Cloud Filters Information Storm

    ~cheers
    Last edited by PipDiddy; 12-20-2008 at 11:47 PM. Reason: Link Violation

  4. #4
    lissyking is offline Newbie
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    hey dude, you need to give us some examples. Also, you shown us an example of the long position, please show us an example of a short entry because when you said vice versa, vice versa in what way? do you mean when you have resistance for the long position it is support for the short position etc etc?

    Thanks

  5. #5
    lissyking is offline Newbie
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    Also what are the setting valus for the ichimoku

  6. #6
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    Default Ichimoku Settings

    The standard settings for an Ichimoku Kinko Hyo chart are 9,26,52.

    The Ichimoku chart is composed of five (5) separate indicator lines. These lines work together to form the complete "Ichimoku picture". A summary of how each line is calculated is outlined below:

    TENKAN SEN ("turning line")

    (HIGHEST HIGH + LOWEST LOW)/2 for the past 9 periods


    KIJUN SEN ("standard line")

    (HIGHEST HIGH + LOWEST LOW)/2 for the past 26 periods


    CHIKOU SPAN ("lagging line")

    CURRENT CLOSING PRICE time-shifted backwards (into the past) 26 periods


    SENKOU SPAN A ("1st leading line")

    (TENKAN SEN + KIJUN SEN)/2 time-shifted forwards (into the future) 26 periods


    SENKOU SPAN B ("2nd leading line")

    (HIGHEST HIGH + LOWEST LOW)/2 for the past 52 periods time-shifted forwards (into the future) 26 periods


    The senkou span A and B together form the Ichimoku "kumo" or cloud.

  7. #7
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    Default Another example of the TRADING SYSTEM : When SHORTING

    Here I explain another trade which I took last week.
    The pair is USD/SGD (Singapore Dollar). As I mentioned, this trading system can be used for any currency pair.

    Am using the same colors for different indicators which were used in the previoud example.

    As you can see:
    Condition 1: Tenkan Sen below Kijun Sen.Condition 2: Chikou Span below the Price Line.Condition 3: Current Price below the Cloud.

    All 3 condition are fulfilled.

    So, we short at the open of next candle at 1.4600.

    Using Chikou span, we draw immediate support and resistance lines.
    We find that the resistance is now at 1.4669. While support can only be found at 1.4391.

    So, our stop loss is now at 1.4669 and take profit level is at 1.4391.

    Risk reward ratio is higly in our favor. Risking 69 pips, we are eyeing to gain 209 pips.

    I exited 1 lot as soon as 1.4391 was reached. And let the 2nd lot run with a small trailing sto ploss of 40 pips. I usually run a trailing stop loss of 2 X hourly ATR.

    ~CHEERS!
    ~Dealing Room on MeetPips.com
    Attached Images Attached Images  
    Last edited by Pipcrawler; 12-21-2008 at 09:24 AM. Reason: spam/ link violation

  8. #8
    Blaiserboy's Avatar
    Blaiserboy is offline Junior Member
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    If you would be good enough to post a couple more of your analyses....... that would be great...

    Thanks


    dave

  9. #9
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    I would definitely post couple of more trades to elaborate the trading system.
    I'll be posting them by tomorrow, as am off for a long drive now with my wife.
    Meanwhile, you can see a number of trades I've entered based on Ichimoku Trading System on meetpips.com; My user name is Dealing Room

    ~cheers
    Last edited by Pipcrawler; 12-21-2008 at 09:25 AM. Reason: spam/ link violation

  10. #10
    lissyking is offline Newbie
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    Are we suppose to log in using your info to view the trades? if so what are the info

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