Good trading conditions

Hello guys,

I have been an inactive member of this forum for several years now trying to get my pieces together after blewing a $5.000 dollar account, real money yeah.

After that, I have been trading demo firsly because forex markets scare the s*** out of me and secondly because i dont want to go in there agin with real money; not until i have a good trading system that makes me feel confortable.

I have been trying to develop an easy system that can provide me consistent profits and i think that i have found it. I have been demo trading a $5.000 account and right now i have it in $54.000

This is not a “strategy” because it doesnt have a set of rules you have to follow, and maybe that is the main reason why I have opened this thread, because I want you guys to help me with entry ideas.

This, more than a strategy itself, is a way to define “good conditions” to trade in a predetermined directios (long or short) but I need help in actually developing the entry rules.
I blindly believe that “trend is your friend” and thats why ALL of my trades have a risk reward ratio of 2:1 (this is what really turned my trading around)

Ok, enough talking and lets go to the charts…

Look at this chart… it’s the 4Hr chart and it only has 2 indicators, an Ichimoku cloud and Heiken Ashi candles
Ichimoku cloud its set to (1, 1, 20)
What I´m really looking for here in this chart is to define a LONG trading period or a SHORT trading period.

When the cloud is green and the candles are green, we are in a LONG period.
When the cloud is red and the candles are red, we are in a SHORT period.

After I have identified the LONG or SHORT trading periods, i highlight in just for visual help; like this…

This is still a 4 Hr chart and the only thing I did was highlighting in a green rectangle the period in which BOTH the cloud and the candles where in AGREEMENT t go up and in red when they where in AGREEMENT to go down.
After I define this, I go to the 5 minute chart to trade in that direction and only in that direction.

And here is where I need your help guys, this is where I want some ideas to time our entries… i really dont have any; I have tried BB, envelopes and oscilators but I’de like to have a different approach.

I only place a 2:1 risk reward ratio trade in the direction of the trend and just wait for it to reach stop loss or take profit (it usually goes for the TP).

This is how the 5 minute time frame and how it looks in LONG PERIOD
As you can see, trading longs here is profitable.

And, this is how the 5 minute time frame looks in a SHORT PERIOD
Pretty easy to be profitable only trading shorts.

Once again guys, please help me time my entries and identifying good entry points to have more winners than losers.
Since all of myt trades have a 2:1 reward, I only have to be right 38% of my trades to be profitable but with better entries I believe i can take it to a 50-50 or even better a 60% aquaracy level.

Thanks in advance for your comments.

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First of all, congratulations on “delurking” and becoming a posting member, and thanks for your post + charts.

With apologies for hitting you initially with a question rather than a comment, as requested, I’m very curious to know how/why you’ve arrived at these most unusual settings for calculating the [I]kumo[/I]?

Well excuse me for my bad english, its not my native language.

My first approach to trading was using ichomku system and I liked it very much because there was no need for other indicators and it was a good visual representation of the chart.
Then later on, I started experimenting with multiple Ichimoku clouds n the same chart from diffferent time frames but my chart was becoming a little messy so i sticked to one cloud with these settings.

Why these settings? Well, they are good for determining the short term trend and when you add on the keiken ashi candles to it, you are measuring short term trend + momentum and that makes it more powerfull.

I have really spent a lot of time messing with ichimoku indicator.

Nor mine; but we both make ourselves understood with no problem. :wink:

I also started off on [I]Ichimoku[/I], have done a lot of research with it, with many varieties of settings, for forex, and I quite like it. This is why I noticed your thread.

I was wondering - without starting off a complicated conversation about how the [I]senkou span A/B[/I], constituting the [I]kumo[/I], are calculated and displayed from the inputs - whether you’ve also tried similar but slightly expanded settings such as 2/4/15 or 3/6/20? I may be wrong, but I had a hunch that they might be helpful to you, for your purposes. Hence my post. :8:

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I just plotted the ichimoku cloud with the setting you just mentioned into my charts and the first thing that came into my mind is thatthey are fast enough and that the differ very little from mine.

We need a fast cloud because a small movement in 4 hr hart represents a big move in the 5 minute charts, which are the ones that I’m interested in right now.

4 hr charts define the perfect conditions to trade and i enter a 2:1 trade with what i consider to be a good stop loss and just wait to see what happens with my fingers crossed.

Over 200 views but only one reply, i guess this was not interesting for none of you.

For me, it was (and is). I think it’s fair to say that [I]Ichimoku[/I] isn’t a very widespread interest, though, in this forum. (Also, it’s been a weekend, and Monday’s a very quiet day, too. Also, threads attract interest as they grow, and this is very new …)

Thank you Lexys

Hi alejobostero,

I am very interested in the development of your thread. I am certain that there are many lurkers wanting to know more as well. Keep it going!

Could you please elaborate on how you trade the M5 chart. It’s clear enough that you trade in the direction of the H4 chart when the cloud and HA candles agree. What parameters are you looking for on an M5 chart entry? Do you simply enter on the M5 chart when the same parameters match the H4 chart?

Green pips for all!

Hello Bobkat,

I use the same clouud in the 5 minute chart, I just wait for theprice to break the cloud in the direction of the 4Hr charts and I put a stop loss above the cloud when going short and below when im going long and a take profit 2 times the distance of the stop loss. Risk:reward ratio of 2:1.
Thats it!

I really want people in here to tell me how they time their entries since I consider that timing good entries will add some profitabilty to this method.

@alejobostero; Hey man I’m in the process of creating my own trading system right now and pretty much what i want to do is look at a bunch of other peoples trading systems and see what i like. I am relatively new, just finished the school of pipsology; so hey man if you could do me a favour of of either PMING me OR posting on here.

Could you provide me with the links that teach you about these 2 indicators:"Ichimoku cloud and Heiken Ashi candle"
Or even better if you could explain what they are, and what in particular you look for when trading these 2 indicators.
This “plan” of yours really intrigued me because it is simple yet very effective.
Also are you using this for day trading? scalping? swing trading?

Again I am in the process of learning right now and any help would be very much appreciated.

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Hello Bobjones1252,

Well, i dont have the links you are asking me about but there are tons and tons of articles about ichimoku and its signals on the web; and heiken ashi candles are just a visual way for me to look at the markets. What I particularly look is a “good entrey point”, so in an uptrend, I’m looking for the price to be below the cloud so there is a good potential that the price has not extended or gone into an overboought level and I look for the price to be above the cloud in a downtrend.

I have a day trading style because I trade the 5 minute charts and my trades usually are active for 2 hours top… usually not more than that.

I hope the best for you

Hey, thanks for the reply. Yes i found links and videos that explain the ichimoku cloud + heiken ashi candles. So i am well aware on how they work now. My only questions is you say that in an UPTREND you look for the price to be below the cloud. Vs what most people do is when in an UPTREND you look for the price to be above the cloud and use the cloud as a support area? Same thing in a downtrend. People wait for the cloud to be above price and again use it as resistance. Could you explain why you trade the way you do?

Yes Bobjones1252,

I believe that a downtrend in a 5 minute chart is just a pullback in a 4 hr UPTREND chart
and that an uptrend in a 5 minute chart us just a pullback in a 4 hr DOWNTREND chart.
That’s why I trade the ichimoku cloud that way.
Hope it makes sence to you

Yes i do understand what you are saying. thanks for the reply!

Hi bobjones1252,
Could you please share the link for the video? Thanks.

Hey i honestly youtube Ichimoku forex. There was a video by DailyFX

Just my experience over the last 4 years of trading: very few people survive the learning process, and at some point I realised that I had to depend on myself, especially once I began to swim into deeper water.

For timing entries, I usually enter at the break of the high of a signal candle (if going long), or the break of the low (if going short). To me, it’s straightforward. If price is going to move up, then it must break the previous high first.

I don’t use the cloud , i use pure price action with candles. What i do is , i put a buy or sell order 10 pips beone the last high candle or low candle . That been said in the direction of the 4hr.

Found it, thanks bobjones1252 !