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.


6 Likes

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.

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

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

Also what are the setting valus for the ichimoku

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.

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


If you would be good enough to post a couple more of your analyses… that would be great…

Thanks

dave

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

Are we suppose to log in using your info to view the trades? if so what are the info

If you can’t access Meet Pips, don’t worry. I’ll be explaining the system with a couple of more examples tomorrow.

~cheers

MeetPips.com is in beta testing right now and we are allowing people to access a few at a time. If you submitted your email address, we will send you an invite to register. So, hopefully we’ll get access to ya soon!

I think the system is relatively simple to follow, with a couple more posts the rules will be easy to apply…

He has found a way to communicate his idea effectively and simply…

A couple more examples will clarify anything we need to know. and I am sure that he will answer any questions we may have if we post charts in here with the questions…

sorry guys for posting outside links.
Will post everythng in this forum itself.
At the moment I don’t have access to my trading terminal.
I ll be posting 2 more charts from last week, which I used to enter trades based on ICHIMOKU TRADING SYSTEM.

~CHEERS :slight_smile:

I started last night to look at a number of charts to see where you may have entered a trade…

Using the ADX and Macd as confirmation seems to be very very sound…

I think you have found simplicity in your method and that makes things much less stressful…

At one time I did a lot of trading on the faster charts, however, I have found that the daily chart is more profitable for me…

Thanks so much for sharing…

dave

hello,

is there anyone to continue discussing abt ichimoku.?Im keen to learn this method…lets discuss again…

1 Like

Hi thanks for putting this system on here, i like the look of it, just have a few questions.

At what time GMT do you put your trades on? You say you use the daily charts so do you do in at 12 am and only have on average 1 trade a day? Do you not have to wait for days on end for your set up?

Many thanks Lukey 22

Depending on the time frame you are using, there can be several trades per day…

I prefer the longer time frames… ie 4 hour and daily… other people use this system on 5 minute charts.

Thanks for your reply, my only trouble i’m having is the the ‘cloud’ factor of this, they never seem to be the right side up, will check tomoz on the 4 hour chart.

“Trying is the first step towards failure.”

Homer J. Simpson.

I think you will have to persist in studying… get more and more familiar with the different aspects. Ichimoku is a great trend trading system, takes time to master its features