Ichimoku Kinko Hyo

[Andrewunknown]

Originally Posted by toukika

You know Japanese sources too?

No, English only. Admittedly limited, but all the basics and some details about advanced strategies are available to us via the resources we have.

Btw: 4xStar asked in another thread, and I thought I'd be helpful to mention: those charts that I post will be most often from Oanda's platform: daily and 3H. For the sake of continuity, I'll try to include H4 and D1 MT4 charts at times, as well.

[4xStar]

Originally Posted by Andrewunknown

those charts that I post will be most often from Oanda's platform: daily and 3H. For the sake of continuity, I'll try to include H4 and D1 MT4 charts at times, as well.

Oh, ok .. that explains the price difference, you were on a 3 hour chart... yes H4 and D1 would be good as I think most people have access to MT4.

[4xStar]

We've just had another Tenkan-Kijun bullish cross above the kumo on the G-Y, however there was a bearish cross a few hours ago .. not sure how to interpret mixed signals like that or if it is just wait & see....

Oops, forgot to say I was looking at 4h timeframe for that cross. Now the tenkan is crossing the rising kijun .. not sure what that means

[4xStar]

Back to the charts Andrew posted in post #14 .. you certainly can see the "depth" that he mentioned as a visual aspect of IKH. The fib chart seems to show future resistance, whereas the IKH chart does not .. but as a visual representation of support and overall trend, the IKH is definitely more dramatic.

Anyone else have comments on these two charts? They are a great way to compare IKH with a more traditional method of charting. It makes me really want to learn more about this IKH as I can see how it could show a new level of information once you learn it.

[Andrewunknown]

Originally Posted by 4xStar

We've just had another Tenkan-Kijun bullish cross above the kumo on the G-Y, however there was a bearish cross a few hours ago .. not sure how to interpret mixed signals like that or if it is just wait & see....

Oops, forgot to say I was looking at 4h timeframe for that cross. Now the tenkan is crossing the rising kijun .. not sure what that means

This is all above the cloud, so the crosses are strong bullish signals; but, as you know, the Guppy has not been in what we would call a smooth uptrend the past several days. Look at the Chikou Span - where is it at (remember, you're drawing horizontally from price back to Chikou, then vertically to price 26 periods ago) relative to the current price? On the 3H, anyway, I see a weak bearish setup there. Also, the Kumo is tightening dramatically, supporting the notion that the pair is consolidating. Nevertheless, price remains on the bullish side of the cloud, making any shorts inadvisable: as we have also seen.

There is the tendency here - at least for myself - to lean on the 3H/4H (for purposes of this point, it makes no difference) a little too much. IKH can be used on these timeframes and will generate excellent predictive results, but the daily is the classic IKH chart that cuts out the chop we're feeling here in this consolidative area. One look at the daily tells you the uptrend is, as yet, unchallenged with the IKH "big picture" unanimously supporting the upside movement.

But, a caveat to that: notice the peaks on the Chikou: 212.57-213.05. Price is struggling here in a way it has not since around 210-210.50. This correlates well to our traditional image of S/R, where we find clear resistance in the 212.80 area. The cloud has tapered to a thin band, and we nearly had a Senkou Span flip early yesterday. In a phrase, then: conflicting signals.

[4xStar]

On the IKH, was there any signal that could have alerted to the big drop the G-Y took overnight? Andrew saw mixed signals the other day, she was overdue for a decent pullback and I just read there is a tendency of price to return to the Kijun line which is "equilibrium".

On the 4 hour there was all kinds of action ... it looks like when price hit the kijun line, that was time to bail .. or if not, when it broke the A span. But I would appreciate input from those more experienced

Andrew do you think it is important to use the 3h timeframe instead of the 4 hour? If so, there is a way to do that in MT4, I can post the instructions here for those who want to use a 3 hour.

[Andrewunknown]

Some IKH analysis of the Guppy posted on the GBP/JPY "Equity Building" system thread elsewhere on the forum:

Talk about an uneventful rangebound day, huh? Well, unless you were daytrading in what turned out to be a pretty clearly defined range - some good opportunities there to clear pips both long and short.

The bottom of the cloud (Senkou Span A) lies at 211.16 currently, while SS-A slopes down mildly to 211.02 by the 0900 ET candle. The 144 comes in for reinforcement at exactly this level, as well. This is where, if not during the increased volatility coming during early Frankfurt/London (0200-0500 ET) we will see an important test of near-term support. A break here will revisit 210.67, and then back to the ~210 area as described earlier.

Tenkan-Sen (blue line) lies above Kijun-Sen (red line) just above the cloud, but because TS takes in only 9 periods of data, the long green and long red candles from early July 07 will be falling off, and with price falling through the cloud this will pull TS down into the kumo (cloud), setting up a bearish cross if price falters through 211.

In other words, unless the bulls resume control of the field to throwback the pair to 211.68+ (and especially 212.10+), the IKH picture is creeping across the line into bearish territory. If price closes below the kumo @ 0300 ET, Tenkan-Sen will follow shortly, crossing top-down over Kijun-Sen. If nothing happens to the contrary and those lines emerge from the bottom of the cloud in the next 24-48 hours, 210.67, ~210 and perhaps even 208.94-209.20 are in the cards. There's nothing fundamental (unless Bernanke's speech sets off a significant USD rally) on schedule that would negate this, so any twists and turns will be technically-based.

I am short the pair from the ascending trendline (white line) break @ 211.66.

[Andrewunknown]

Originally Posted by 4xStar

On the IKH, was there any signal that could have alerted to the big drop the G-Y took overnight? Andrew saw mixed signals the other day, she was overdue for a decent pullback and I just read there is a tendency of price to return to the Kijun line which is "equilibrium".

On the 4 hour there was all kinds of action ... it looks like when price hit the kijun line, that was time to bail .. or if not, when it broke the A span. But I would appreciate input from those more experienced

Andrew do you think it is important to use the 3h timeframe instead of the 4 hour? If so, there is a way to do that in MT4, I can post the instructions here for those who want to use a 3 hour.

Sorry about the delay responding here, 4xStar. I'd like to see some more discussion here, so I'll try to be more vigilant.

Going back to 06/26-06/27, IKH produced little signaling the reversal with any really precision. But, there is an asymmetry between price and the kumo that did indicate a fall was probable:

One thing easily noticed is that the very thick kumo ascendant @ about a 45 degree angle from 06/12 tapers off and turns sideways following the decline in price on 06/17-18. The kumo steps up mildly after that, but the angle and density are gone. Now, Contrast the drop off in the kumo with the relatively steep ascent in price from 06/23-06/25. See any divergence here? This is where price and the cloud are telling different stories. The break and then failed re-test of Kijun-Sen late 06/26 - early 06/27 confirmed this. In addition to this, and what really signaled the reversal here was the evening star/bearish engulfing pattern on the 0300-0900 ET 06/26 candles.

[4xStar]

Are you on a 3 hour timeframe for the analysis below? And the candles mentioned are 3 hour as well?

Originally Posted by Andrewunknown

One thing easily noticed is that the very thick kumo ascendant @ about a 45 degree angle from 06/12 tapers off and turns sideways following the decline in price on 06/17-18. The kumo steps up mildly after that, but the angle and density are gone. Now, Contrast the drop off in the kumo with the relatively steep ascent in price from 06/23-06/25. See any divergence here? This is where price and the cloud are telling different stories. The break and then failed re-test of Kijun-Sen late 06/26 - early 06/27 confirmed this. In addition to this, and what really signaled the reversal here was the evening star/bearish engulfing pattern on the 0300-0900 ET 06/26 candles.

[Andrewunknown]

That's correct. I know we've discussed this before and the 4H would be much more helpful, even though there isn't much deviation. Nevertheless, the levels mentioned are still different. For now, I'll have to pop over to the WinOS side of my laptop to render the 4H version of whatever my analysis is, grab a screenshot or two and post it from there. No big deal.

More to come. I'm think of tossing some funds into an IKH-dedicated sub-account on which I'd take trades from 3H/4H/1D charts, and I could post any trades taken here for discussion.

IKH is a very powerful tool that people are intimidated by and/or wholly ignorant of in the West. The same could've been said about candlesticks before Steven Nison published his first book, but look at the pride of place given them by most technicians today. I'm not suggesting IKH is as elemental to trading as the visual representation of a data point (e.g. a 1H period); just that it is a "well-kept Japanese trading secret" about which most western technicians (even many institutional traders and analysts) know relatively little. Hopefully more people will develop some interest on the topic here!