Hello, I have been trading for a little over a year now and have decided to try to use the Ichimoku indicator on the daily charts to make some good trades!
My reasoning: I have not done well on the shorter time frame charts and feel that the daily charts are much less volatile and thus, easier to trade on. Also, as far as indicators go, I’ve tried lots but the Ichimoku indicator provides a really clear indication of what a future trend may end up looking like.
I have a demo account right now but hopefully this endeavor will be profitable so I can throw in some real money!
Spotted a set up on the AUD/USD pair. It’s shown below. Looks like the price broke out of the cloud, retreated a bit, and is now on it’s way back up. The red arrow indicates where I went long on it.
Here’s the same trade on the weekly chart. You can see a higher low (the area in the box), indicating a trend reversal. The uptrend had been going on for a few weeks and looks pretty good.
I have my take profit at 2.5x my SL level. The reason for this is that I would like to make 5% of my account per month when i’m using real money. If I risk 2.5% per trade, I would only have to win one trade per month to meet my goal! I could even be as bad as 50% and still meet it!
We’ll see how these next few months go, hopefully I can do better than 50% accuracy.
As it so happens, I do see another set up! It’s on the dollar-yen pair. A cloud break to the bottom: Red arrows indicate where I went short
Here’s the same trade on the weekly chart. Looks like a textbook symmetrical triangle, breaking to the bottom. Hopefully, that means the daily is on it’s way down too. Again, tp is at 2.5x my stop loss.
Looks like there’s another good set up on the dollar-swissie. Here’s the daily chart i’m looking at:
Here’s the same trade on the weekly chart:
Again, i’m sticking to the 2.5 reward to risk ratio. I decided to go with this trade because both the daily and weekly charts are indicating that the price will go down.
Haven’t posted in a couple of days, wanted to wait and let the trades play out a little.
Unfortunately, both my dollar-swissie trade AND dolar-yen trades went south and tripped my stoplosses. The red arrows on the charts below indicate where I lost.
Here’s the dollar-swissie:
and dollar-yen:
The good news is, my first trade (AUD/USD) is still doing well! I also made another trade this past friday on the AUD/JPY pair. Here it is below…it’s still doing find at the moment.
Not gunna lie, it definitely sucks to have lost two of the past three. Does anybody have any advice as to how to proceed? I guess three trades is nowhere near enough to establish how good a system will be. I’m planning on sticking to it for a while longer before i seriously consider revamping my strategy. Who knows, maybe I end up winning the next two and everything will be fine!
I definitely am enjoying trading over the daily time frames more so than the shorter time frames. Just from purely a time- saving standpoint…it’s nice not worrying about trading constantly as I was doing on the shorter time frames. I just devote about 20 minutes per day when I wake up for checking the charts and that’s all I need!
Last night, I set an entry order for the #-aussie pair. It must have tripped last night. Here’s the set up below:
The good news, all three trades i’m currently in are winning! Hopefully they keep going until they hit my TP. That would alleviate all uneasiness from my previous losses. I’ll just have to wait and see!
Thankfully, it looks like all three of those trades are looking good (at the moment)! They can be seen below.
I have been watching the market this past week but haven’t really seen any good positions open up. I’m a little concerned about it actually…I know there will be times where I need to wait (the most important positions you’re in are the ones you aren’t in, after all!), but hopefully I will see enough good setups every month to account for my inaccuracies. 3-5 per month should do it so we’ll see. I’m not going to force anything.
The mindset i’m trying to adopt is that of high altitude mountaineering…not that i’ve done any, although I have climbed a few mountains in Colorado and think it’s a good analogy. Anyway, the way to survive is to be patient. Some great mountaineers have takes 3, 4, even 5 attempts to successfully summit a high mountain. The key is to wait until conditions are perfect before making any attempt…otherwise, it’s a recipe for disaster. Most disasters could have been prevented had those unfortunate climbers assessed the situation and deemed it too dangerous to proceed, instead of letting ego get in the way. The mountains will always be there. I need to think this way in my FOREX trading…i need to wait for the perfect opportunities to avoid another account blowout (thankfully only a $250 micro account that lasted a year!).
I’ve read ‘Reminiscences of a Stock Operator’ a few times. In it, Edwin advocates the methodology of holding on to your winning trades and discarding your loosing trades. It seems to make sense, however it’s in contrast to some of the stuff i’ve read on FOREX that says the best way to win is to set your take profits and stick to them religiously.
Now that i’m in some winning trades, i’m conflicted as to which methodology would be best. For now, i’m going to stick to my strategy but it’ll suck to see trades continue to go in my favor when i could have been on those gravy trains!
Just an update…still in all three trades and all are very close to hitting their respective take profits. I think i’m going to go with the strategy of sticking to my take profits religiously. I was back tracking on the charts of the trades I’m in and noticed that it’s pretty random as to how dramatically the price breaks through the cloud. That is, sometimes the price continues for a LLLOOONNNGG time after breaking through the cloud. But other times, it will only break through for a week or two. Sticking to my take profits will ensure consistency.
@Forexmike as of now, I am only trading cloud breakouts. I’ve tried some SMA/EMA crossover trading in the past but haven’t really utilized the tenkan and kijun yet. I think i’m just trying to keep it simple for now but we’ll see if the cloud breakouts by themselves will be enough to profit.
I’m really liking Ichimoku so far! I hope it will end up working out for me. I think i’m going to give it until January or February before considering putting money in. By then, I should have made 20 trades or so, which would give me a better idea of how accurate my strategy is.
just, stay calm…it’ll be ok. Don’t panic…It’s Important Not To Panic…DON’T PANIC, STAY CALM!!!
Ok, so this wasn’t what I expected to see when I checked the market today lol! It’s all good though, all three were going my way for days…the market needed to relieve itself temporarily. I just hope this change of heart doesn’t last for long!!
It really is important to stay calm though. There’s not much I can do about it anyway at this point (intelligently anyway.) The best I can do is to be as emotionless as possible and to have faith that my strategy will prevail in the end!
And if not, it’ll be back to the drawing bord! I really hope it does though, I’m enjoying this style of trading very much. It’s nice to only have to check charts once per day! 15 minutes is really all it takes.
Just to say keep up the good work guys. Im using ichimoku crossovers with some success. Need a bigger sample of trades for confirmation though. Will keep you posted.
Do you find any particular currency pair works best with your system?
OP,
I love that you are interested in the Ichimoku! It’s my favorite. I went from typical MA crossovers to the Ichimoku. There are some concerns I have with what I’m seeing though. First I think it’s a great idea to start out with just one of the many indicators that Ichimoku offers in order to get used to it, so cloud breakouts is your first one? Awesome! There are so many things to consider when trading Ichimoku though.
I know you don’t use the Tenkan-sen/Kijun-sen crossover (TK cross) yet, but even so, just seeing where the actual TK cross happens can give you an idea of how weak or strong the movement is. There are three types of TK cross signals and they depend on where it happens:
A [B]weak [/B]signal is a TK cross that happens on the opposite side of the cloud based on what direction you are looking to go i.e. You want to short the EUR/USD but the price is above the cloud and the TK cross happens right above the cloud. This is a weak signal and there is a good possibility you are just looking at a retracement. Chart GBPUSDpro, D1, 2013.10.27 15:24 UTC, FOREX.com, MetaTrader 4, Real - MetaTrader Trading Platform Screenshots
A [B]medium [/B]strength signal is a TK cross within the cloud. i.e. using our same example, you want to short the EUR/USD and price just jumped below the cloud (your breakout) and the Tenkan just crossed within the cloud. Assuming the price isn’t ridiculously far away from the Kijun, this could be a good short setup. (keep in mind the Kijun is like a magnet for price action, if it moves too far away, price will come back.)
This is just a SMALL portion of what you can do with Ichimoku. If you haven’t already I suggest you check out a lot of the videos on youtube. There is a ton of info out there. Hope this helped. Happy trading!
Oh, as for the previous questions about trading on lower time frames, I only use 4hr or daily to trade as I’m a swing/position trader.
d0c - Thanks for the advice! Yes, the plan was to just trade breakouts for the time being…mostly because I didn’t know how the Tenkan-sen/Kijun-sen works! Thanks for the crash course though, it seems pretty simple and maybe could help to pinpoint winners a little better than just breakouts…i’ll have to try to incorporate it into my future trading.
Justdamoney - as for now, I’m really trading any pair that gives me a positive signal. I’ve noticed that some pairs are wildly volatile (in relation to the cloud), and others that are nice and smooth and predictable…I try to stay away from the former!
