Ichimoku Kinko Hyo 101

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Thread: Ichimoku Kinko Hyo 101

  1. #1
    Join Date
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    Thumbs up Ichimoku Kinko Hyo 101

    Ok so when i was introduced to day trading no one gave me any good direction as to finding strategies with a high rate of accuracy. So I would like to take the time to give you the skinny on months worth of learning the markets and developing the most accurate indicator strategy I could come up with.

    I played with moving averages and oscillators for weeks with little success. Most every broker i asked said not to rely on indicators as entry and exit signals and just go on price action. (Price action is still the best way to trade so understand price action, but as far as indicators go continue reading). The thing is that an indicator cant calculate until a bar closes, so all indicators lag price itself; so indicators tend to give a lot of false signals. Plus they give you a signal when its too late. None really give you a heads up on an upcoming trend or a developing trend so much. Except One, The ICHIMOKU KINKO HYO.

    Most look at it and run because it looks complicated. Trust me its not! there is little literature or video info online because most people don't use it or talk about it. My strategy incorporates four parts. 1) Fundamental analysis <news> 2) Price action <duh> 3-4) Technical Analysis: Ichimoku + Atr Tralling Stop

    Ichimoku 101:


    This indicator incorporates a few aspects Kijun, Tenkan, Senkou, Kumo, and Chikou.

    Tenkan + Kijun= [average high of (x) periods+ average low of (x) periods]/2

    Tenkan is usually 7 or 9 periods. Reason= 1.5x days in week of trading between old trade week length vs new trade week length.

    Kijun is 22 to 26 periods. Reason= its the number of days in a trade month, new vs old.

    So these two tools act as Moving Averages, BUT they take into consideration the full range of the moves and not just a smooth line based on the close of a price. When Tenken crosses Kijun and is above its bullish, if Tenken is below its bearish. Got it? Good!

    Senkou is the same calculation but it is 52 to 44 for the number of weeks in a year... BUT it is moved forward 22 to 26 periods to project long term future trend development and projection. the Senkou also creates a cloud with its A span and B span. This is called the Kumo. The rule is as such, trade above and below the clouds if price is below the cloud, the trend is bearish, if its above its bullish, if its in the cloud its neutral. The cloud acts as strong support/resistance. So if it breaks through the cloud its called a kumo breakout and is a strong reversal signal. The thicker the cloud, the stronger the support/resistance.

    And finally Chikou, the most simple and yet maybe the most important. It is price moved backwards 22 to 26 periods. When the Chikou crosses where price was 22 to 26 moves ago either above or below, it is a confirmation as to a bullish or bearish trend. Use these all in conjunction to weed out false signals and it makes for a great entry and exit strategy for any kind of trading on any time frame.

    ATR Trailing Stop:

    I however like to swing trade, and i simply use this indicator as my exit strategy. Like the ichimoku it takes the Average True Range of X amount of periods and makes a stop line based on the range of previous moves, looking to catch strong reversals before its too late.

    Not many automated strategies can do this operation so you wont hear about it too much but it is my favorite strategy and I had wished someone had shown me these long ago when i first started. Dont be intimidated by the seemingly complex Ichimoku, that is in truth very simple. Its advantages are that it takes into consideration both Time and Range of previous price action in a way no other indicator can in such an incredibly visual way to show you trend plain as day.

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    Powerslave likes this.

  2. #2
    Ltrader is offline Junior Member
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    Jun 2011
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    Quote Originally Posted by Ichimoku Kinko Hyo View Post
    Ok so when i was introduced to day trading no one gave me any good direction as to finding strategies with a high rate of accuracy. So I would like to take the time to give you the skinny on months worth of learning the markets and developing the most accurate indicator strategy I could come up with.

    I played with moving averages and oscillators for weeks with little success. Most every broker i asked said not to rely on indicators as entry and exit signals and just go on price action. (Price action is still the best way to trade so understand price action, but as far as indicators go continue reading). The thing is that an indicator cant calculate until a bar closes, so all indicators lag price itself; so indicators tend to give a lot of false signals. Plus they give you a signal when its too late. None really give you a heads up on an upcoming trend or a developing trend so much. Except One, The ICHIMOKU KINKO HYO.

    Most look at it and run because it looks complicated. Trust me its not! there is little literature or video info online because most people don't use it or talk about it. My strategy incorporates four parts. 1) Fundamental analysis <news> 2) Price action <duh> 3-4) Technical Analysis: Ichimoku + Atr Tralling Stop

    Ichimoku 101:


    This indicator incorporates a few aspects Kijun, Tenkan, Senkou, Kumo, and Chikou.

    Tenkan + Kijun= [average high of (x) periods+ average low of (x) periods]/2

    Tenkan is usually 7 or 9 periods. Reason= 1.5x days in week of trading between old trade week length vs new trade week length.

    Kijun is 22 to 26 periods. Reason= its the number of days in a trade month, new vs old.

    So these two tools act as Moving Averages, BUT they take into consideration the full range of the moves and not just a smooth line based on the close of a price. When Tenken crosses Kijun and is above its bullish, if Tenken is below its bearish. Got it? Good!

    Senkou is the same calculation but it is 52 to 44 for the number of weeks in a year... BUT it is moved forward 22 to 26 periods to project long term future trend development and projection. the Senkou also creates a cloud with its A span and B span. This is called the Kumo. The rule is as such, trade above and below the clouds if price is below the cloud, the trend is bearish, if its above its bullish, if its in the cloud its neutral. The cloud acts as strong support/resistance. So if it breaks through the cloud its called a kumo breakout and is a strong reversal signal. The thicker the cloud, the stronger the support/resistance.

    And finally Chikou, the most simple and yet maybe the most important. It is price moved backwards 22 to 26 periods. When the Chikou crosses where price was 22 to 26 moves ago either above or below, it is a confirmation as to a bullish or bearish trend. Use these all in conjunction to weed out false signals and it makes for a great entry and exit strategy for any kind of trading on any time frame.

    ATR Trailing Stop:

    I however like to swing trade, and i simply use this indicator as my exit strategy. Like the ichimoku it takes the Average True Range of X amount of periods and makes a stop line based on the range of previous moves, looking to catch strong reversals before its too late.

    Not many automated strategies can do this operation so you wont hear about it too much but it is my favorite strategy and I had wished someone had shown me these long ago when i first started. Dont be intimidated by the seemingly complex Ichimoku, that is in truth very simple. Its advantages are that it takes into consideration both Time and Range of previous price action in a way no other indicator can in such an incredibly visual way to show you trend plain as day.

    Name:  ichimoku-kinko-hyo.jpg
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    Hi Ichi.

    I looked at this method a few months back but as yet have not implemented it, Look forward to see how you get on.

  3. #3
    CloudyPips is offline Newbie
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    No offense but I've been using Ichimoku for a very long time, it is the one and only system I trade with and while I agree that it is far superior to other charting methods, I'd ask that you rewrite this original post and include the full names/proper terminology of the indicator and its components, and show Goichi Hosoda a bit of respect. When you inform others about something, it's best to do it as accurately as possible.

    Aside from that, anyone that wants two really great in-depth beginner resources can check out these websites. I am in no way affiliated with these sites, however it is where I got a lot of my basis of Ichimoku from. My forum status doesn't allow me to post links so this is as good as it gets.

    IchiWiki - kumotrader[dot]com <-- All your basic IKH information.

    Ichi360 - ichi360[dot]com <-- A great Ichimoku blog as well as home to a great multi-time frame indicator for Ichimoku so you don't have to switch time frames.

    Ichimoku Trade - ichimokutrade[dot]com

    The last site I provided is chock full of really great videos from an extremely established Ichimoku trader and will provide an excellent resource to anyone looking to explore this great tool. It requires a free registration to view them, but you don't have to use your real information if you don't want to. After you register just go to "Education" and check it out.

    Enjoy.
    blessedtrader likes this.

  4. #4
    myrmigki is offline Newbie
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    This question goes to all posters and viewers. What timeframe are you working on?

  5. #5
    myrmigki is offline Newbie
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    Quote Originally Posted by CloudyPips View Post
    No offense but I've been using Ichimoku for a very long time, it is the one and only system I trade with and while I agree that it is far superior to other charting methods, I'd ask that you rewrite this original post and include the full names/proper terminology of the indicator and its components, and show Goichi Hosoda a bit of respect. When you inform others about something, it's best to do it as accurately as possible.

    Aside from that, anyone that wants two really great in-depth beginner resources can check out these websites. I am in no way affiliated with these sites, however it is where I got a lot of my basis of Ichimoku from. My forum status doesn't allow me to post links so this is as good as it gets.

    IchiWiki - kumotrader[dot]com <-- All your basic IKH information.

    Ichi360 - ichi360[dot]com <-- A great Ichimoku blog as well as home to a great multi-time frame indicator for Ichimoku so you don't have to switch time frames.

    Ichimoku Trade - ichimokutrade[dot]com

    The last site I provided is chock full of really great videos from an extremely established Ichimoku trader and will provide an excellent resource to anyone looking to explore this great tool. It requires a free registration to view them, but you don't have to use your real information if you don't want to. After you register just go to "Education" and check it out.

    Enjoy.
    CloydyPips that's some very usefull information you posted today. I checked the second site you suggested but it seems I can't run the indicator ichi360v8. It looks like it is ιδλε. Any chance you can provide information on running it or even posting it in this thread for us to download?

  6. #6
    Join Date
    Mar 2012
    Posts
    2

    Default just tryin to help

    Yes there are a few good resources online and thanks to those who posted a those resources... however this was just a helpful short explanation of my strategy with the atr stop coupled with it. I was attempting to simplify all the terminology so folks don't scare themselves out of looking into ichi before they try, and also because there weren't many threads on babypips. No need to hate on my posts. Were all here to help, not to be critical over dumb stuff for no reason.

  7. #7
    CloudyPips is offline Newbie
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    Not hating on your post, just politely asking you to be thorough.

    The Ichi360 indicator is for MT4. Make sure to download Version 2.

    Google ichi360_Monitor_V2 MT4 if you cant find it from Ashers blog.

    Install it into your MT4 brokerage platform under Experts > Indicators and restart the platform. Once you've restarted the platform, find the indicator and add it to your chart which will bring up the settings. You will need to adjust the positioning of the window to see it, do this by the following settings:

    TextOffSetFromRight: 50
    TextOffsetFromTop: 100

    Tweak as necessary to get it positioned how you want it.

    The proper use of this indicator is to only go long or short when 80% (13/16) of the arrows are all pointing up (go long) or pointing down (go short). Doing so will greatly increase your probability of success using Ichimoku. Do not change any other settings besides positioning and colors. Cheers.
    myrmigki and Powerslave like this.

  8. #8
    CloudyPips is offline Newbie
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    Also, let me explain how to view this indicator so your analysis of IKH can be even more in-depth.

    The columns are separated as follows: PA - P/KS - TS/KS - CS

    PA - This is the current position of price action to the cloud. Up arrows are price above the cloud (bullish), down arrows are price below the cloud (bearish), sideways arrows are price moving through the cloud (neutral).

    P/KS - This is the current positioning of price versus the Kijun-sen. Price above KS is bullish, Price below KS is bearish.

    TS/KS - This indicates the position of the Tenkan-sen to the Kijun-sen. If the arrow is up, Tenkan-sen is above Kijun-sen. If the arrow is down, Tenkan-sen is below Kijun-sen. If the arrow is sideways, they are moving almost on-top of each other, meaning the market is ranging/neutral.

    CS - This is the Chikou Span in relation to price. If the Chikou is above price 26 periods ago, arrows point up signalling a bull market. If the Chikou is below price 26 periods ago, arrows point down signalling a bear market.

    Then for the rows you have the main time frames and how price is moving in relation to IKH.

    Don't take this as lightly as just looking for arrows and going with it. You need to be able to interpret what this indicator is telling you.

    If the daily and weekly arrows are all pointing up but 1h and 4h are all pointing down, chances are high that the market is just going through a daily/weekly retracement and you will need to look at your daily chart for the most recent Chikou span peak (Chikou peaks are used as dynamic support and resistance, and 90% of the time hold) to see where the market will retrace to.

    IKH is most accurate trading based off the daily charts, and is a medium to long term trend following system designed to catch the "meat" of the trends.

    Feel free to ask any other questions.
    myrmigki and Powerslave like this.

  9. #9
    d-pip's Avatar
    d-pip is offline FX-Men Honorary Member
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    Quote Originally Posted by CloudyPips View Post


    Don't take this as lightly as just looking for arrows and going with it. You need to be able to interpret what this indicator is telling you.

    If the daily and weekly arrows are all pointing up but 1h and 4h are all pointing down,

    Feel free to ask any other questions.
    Arrows? The Ichimoku indicator doesn’t use arrows.

  10. #10
    CloudyPips is offline Newbie
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    Quote Originally Posted by d-pip View Post
    Arrows? The Ichimoku indicator doesn’t use arrows.
    If you re-read what I'm discussing you'll find that I'm talking about the ichi360_monitor_v2, which is an indicator that goes WITH Ichimoku...I am not referring to Ichimoku Kinko Hyo itself.

    It is a multi-timeframe IKH panel so you can see what Ichimoku is doing on the 1h, 4h, daily, and weekly timeframes without moving from your daily chart.

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