With this conservative strategy, we are going to get stopped out for a profit or get stopped out for a minimum loss when we are wrong. With the current stop, we are guaranteed pips if we get stopped out the following day. Notice: We are adjusting our bearish alert as per our trading plan. Do not forget about adjusting tile bearish alert even though you are in a bullish trade.
Price can drastically change tomorrow. For every trade, you need to record all the statistics so post. Also, notice the duration of this trade. It was a nice trend. It took a long time, so there is a high probability of a trend continuation trade to come. Ichimoku Backresting 65 I?
What would happen? You can see the results in Figure 3. The charts show that we would have been stopped out of the trade at the early part of the trend. Since our trade exited, we need to set up for a new trade. In the worst-case scenario, if you enter a trade and the values are out of "boundary" Ulen exit the trade right away. Therefore, this is still part of the major trend. In examining the chart, you can notice that we have set up for a trend continuation trade because all the Ichimoku n i dicators are still good.
Since the trend has started, a major pullback has not occurred. Therefore, we need to be careful in entering continuation trades before a m3jor p ullback has occurred. We will now move forward with our backtest. On May 10, , our Kijun Sen alert got triggered as shown in Figure 3. Our trading plan dict,ates that we change the entry to an alert. We had chosen to do this in the tradin g plan because when price crosses over the Kijlln Sen, it indicates a trend change. With a possible trend change, we do not want to keep a "floating entry.
On June 8, , our bearish alert was triggered Figure 3. In the 1chimoku analysis, we have two concerns. In order to resolve bOUl of these items, we are going to place a n entry below the next support level Figure 3. When price enters at that value both the issues should be resolved. If not, we will exit on the day we entered. Notice how we are predicting where we want price to be in order to resolve all the Ichimoku conflicts?
You have to be able to do that n i order to trade 1chimoku. Therefore, our entries now become alerts. Notice how close we were to entering the bearish trade Figure 3. We missed it by 5 pips! GUH": :J. GUH": a. The buffer kept us out of this trade. This is part of the optimized section. The chart displays the bullish and the bearish alerts. Notice that we placed the bullish alert very high. We did not even attempt to put an entry above the top of the Kuma Cloud because there are not more than 50 pips between resistance values.
The safest thing to do was to place an alert below the ultimate high indicated on the chart. On July 2, , our bullish alert was triggered Figure 3. In our Ichimoku analysis, we have two concerns. WiUl an entry at 1. The second is if we set up a stop of KS - pip buffer, the stop would be 1.
This is a distance of, which is more than pips according to our trading plan. Because this is not a significant difference, we are going to move forward with the entry assuming that an entry price would have equalized wilhin pips from Ule KS.
If not, we will use TS as our stop according to our trading plan at entry Figure 3. Ichimoku Backresting URI': a. If you said "yes" then you just violated your trading plan. Do you see where we violated the trading plan? If you found the mistake we made, congratula. If you did not find the mistake then you need to revisit your trading plan and study it further. TItis is your guide to being successful. The mistake is Ulat we used Ule short side bearish buffer for entry and also for the stop.
We are supposed to use 40 pips instead of On July 10, , our trade entered on the bullish side Figme 3. On July 31, , we were almost stopped out Figure 3. Notice how the pip buffer is working well. We missed the stop by 5 pips! In Chapter 4, we talk about optimizing the trading plan.
In order to optimize your trading plan to maximum profits and minimize losses, you have to take note of small things such as missing the stop by 5 pips as you are backtesting. This way, you have some idea of what you can try during the optimization stage. Ichimoku Backtesfing 73 ,. Rarely will you get stopped out at the initial lisk. There are only two chances of this occurring: 1.
Tchimoku charts were not interpreted correctly. Someone did not look at all five Ichimoku indicators and make sure that all were good. Random events in the market where the instrument gapped drastically in a short period of time. TABU;; 3. Can you guess why we did not set up an entry for a bullish continuation trade again? The reason is that the Chikou Span is close to price. Therefore, it is dangerous to place an entry again.
There is no haml in placing an alert because it will trigger before a possible entry. UKE: a. In examining the charts, the Ichimoku indicators illustrate that we are not ready for an entry yet Figw-e 3. Therefore, we are going to reset our alerts again and continue with the backtest Figure 3. On Aug 15, , the bearish alert triggered again Figure 3. Again, the charts aTe not ready for an entry signal yet. A pullback willprobably set up a bearish trade equalizing allthe Ichimoku variables.
SOUl alerts are set up to trigger right before the Kuma shadow topibottom. We have done this in order to set up entries for breaking out of the Kumo shadow. We have not entered a trade due to the Ichimoku signals not being set up yet. Yes, we did miss the big move but remember we have not lost any money.
One of the goals for our trading plan is for it to work for exceptions but in general it should work for the majority of n alltime frames and all currency instruments. If you do, you are ucurve fitting," which is not a good idea. The people that "curve fit" will never have a stable trading plan because it is like a revolving door, changing over and over.
So, are the charts ready for an entry now? Is Figure 3. If you said uYes" then you violated your trading plan. Remember, we are trading the short side i. The Bearish side has a different set of rules then the bullish.
Notice in Figure 3. On August 31, , the Bullish alert was triggered as illustrated in Figure 3. After a couple of bearish alerts being triggered, price reo versed and went bullish. Overall , if we choose a nice bullish entry, all the Ichimoku indicators should be supporting a bullish trade. With this entry, we are still within the pips of price to the Kijun Sen. On September 12, , a trade was entered on the bullish side see Figure 3. The entry statistics are shown in Table 3.
We are acijusting our stop and alerts every day. Also, we have to monitor price versus Tenkan Sen to make sure they are within limits at all times. I know I have repeated matlY things over atld over but it is needed, The goal is to learn through repetition. The trade statistics are shown in Table 3. On this day, our trade went into Preserve mode. Also, we now have a free trade, which means we will make a profit even if we get stopped out now.
Notice tllat tile closing price is 1. Our trading plan had stated tllat if price was pips away from Tenkan Sen, we should exit. As a result, we should exit, right? If you do not follow your trading plan then you are gambling instead of being a system trader. In our trading plan, it mentions that you exit when price is pips or more away from the Tenkan Sen wizen it 'is jlo,t. If you look at the charts, the Tenkall is not tlat so we should not exit.
Let us now go back and correct the mistake. We will continue WiUl Ule trade because we should never have exited Ule trade at all. On October 3, , the trade exited with a profit as shown in Figure 3. This could be an optimization technique that can be tested.
Basically, you get out when price is far from the Tenkan Sen and then place another entry above the last high just in case the trend decides to continue. Since the Chikou Span is still in an "open space," we are going to be looking for a trend continuation trade.
The enlry statistics are listed in Table 3. We are getting close to Preserve mode but are not tllere yet. Our risk has now been reduced to this less than pips. Figille 3. We are guaranteed to make I plus pips. November 12, , the bullish trade exited with a profit as illustrated in Figure 3. The trade statistics are listed in Table 3.
Note that no major pullbacks have occurred yet. Ichimoku Backtesring The entry trade statistics are shown in Table 3. The distance between price and Kijun Sen is , without the entry buffer. This is above the pip distance that we are willing to accept.
Should we override the trading plan because it is only 6 pips? We do not want to override so we will exit the trade right away, The exit statistics are listed in Table 3. The statistics for the trade as listed in Table 3. We did not enter a trend continuation trade because the Chikou Span is too close to historical price. The charts in Figure 3. There is really no trade because price is now below Ule Kwno Cloud. TABU: 3.
UKE: ;J. We continue moving forward with our backtesting almost completing one year. The bearish alert in Figure 3. Price is still not below the Kuma Cloud so we are going to reset the alerts Figure 3. In Figure 3. We are still not ready for a bullish entry according to Figure 3.
We chose the bullish alert much higher this time because we need a big upward movement to cause the Tenkan Sen and the Kijun Sen to cross along with moving the Chikou Span away from the historical price.
On January 4, , the bullish alert was triggered Figure 3. Therefore, we have reset the alerts, which are shown in Figure 3. The entry information is shown in Figure 3. From Ule chart, it is apparent that we still cannot enter. Tllis time, the issue is price from the Kijull Sen. Therefore, we have reset the alerts and wait again as illustrated in Figure 3.
At this tim e, the Ichimoku indicators are not ready for a bearish entry at all as illustrated in Figure 3. On February 1, , tile bullish alert was triggered as illustrated ni Figure 3. The Ichimoku indicators would be fine if we selected a bullish entry. However, the problem is that the Tenkan Sen is far from price. It is outside the pip range we have specified in our trading plan.
Now, we have to select tile new bullish alert. If we go higher than the value we have at this time, we could miss tile break. Therefore, we are going to keep the same alert tilat we had before. If you look back to the last possible entry, which we did not enter because of the price being far away from the Tenkan, you will see that it saved us from a loss. This is the reason why we have that in our trading plan. Looking at the charts on February 26, , you see that the Tenkan Sen and price have equalized and we are ready for a trend to begn.
All i the Ichimoku indicators are set up and ready for the trend. Therefore, we are going to place our entry, alerts, and stops. The entry statistics are shown in Table. Notice that price is at 1. This is more than pips away. Therefore, we have to exit the trade according to our trading plan.
The exit statistics are shown in Table 3. Wait a minute, is the Tenkan Sen flat? No, it is not, and that pip rule for Tenkan Sen is when it isjlal. We hope you caught If you did not catch it, you have to do something different now to leam because what you are doing is not working. You are not retaining the trading plan infonnatiOIl. One suggestion that T recommend to all of my students is to print and laminate the trading plan, both the bullish and the bearish trading plans. Once laminated, hang it on top or bottom of the computer screen TAlU.
This way, you will continuously see it over and over. Because it was a mistake, we are going to continue with the open trade and not close it out. That "'. It may change later in time but so far it has worked for more than 1 1h years of backtesting. On March 20, , we exited our trade with a profit. You can see the chart n i Figure 3. The trade statistics Table 3. In this trade, we captured more than 50 percent of the max profit, which is really good. It is hard to capture the entire trend, especially from the beginning of the trend to the end of the trend.
We definitely cannot capture the beginning of the trend because the Chikou looks at 26 periods Le. We should not get upset at all about this because it is hard to recognize the beginning ofthe trend. In addition, there is a lot of "chop chop" at the beginning of a trend because a trend typically proceeds a consolidation period. We are now going to set up the chart for both Bullish and Bearish alerts.
No entry will be placed because the Chikou Span is getting closer to the historical price Figure 3. We are now going to set up for a bullish entry because all the Ichimoku indicators are indicating bullish. Notice how far price is from both Tenkan Sen and Kijun Sen; it is outside our trading plan range. We have to set up alerts and be patient Figure 3. We are going to keep our alerts in the same place and just move forward with the backtest. The bullish alert was triggered on April 10, Figure 3.
Price now has equalized with Ule Kijun Sen so we can set up a bullish entry Figure 3. On April 16, , a bullish trade was entered and is illustrated in Figure 3. This is the second bullish trade we will be entering in the trend. This is an optimization change Ulat you can try.
On April 24, , we were stopped out for a loss for the bullish trade Figure 3. The trade statistics are shown in Table. Wow, this is a plus pip loss. What happened? The buffer was 40 pips. That was the reason we exceeded Ule pip loss value. You should think about this trade and think of different ways on how you can eliminate this loss Le. One change we can make is to say We discuss this later in the optimization chapter. For now, we will take this loss. We will have losses; however, the goal is to minimize the losses.
This trade was minimized to a pip loss. We do not want to enter another bullish position W1W we get some type of pullback now. We failed at one continuation trend trade without a pullback, but we do not want to fail on two before a pullback has occurred. More than one month has gone already and none of our alerts have triggered. You can see the chart pattern in Figure 3. On July 2, , our bullish alert finally triggered as shown in Figure 3.
Many people wonder how they can make a living trading if there are months when there are no trades. Remember, we are only backtesti. If you look back at what we have been doing, you wiU notice that we are analyzing an instrument once. Once the entry or Ule alert triggers, we then go back to that instrument.
Notice Ulat the entry is too far from Kijun Sen. Therefore, we cannot enter yet. Some may say why did you choose an enny so high? The entry was the buffer above the last high. Any value below the last high really did not fit our trading plan. I leave it to you to go through this exercise to see what would have happened. All the Ichimoku indicators are good for a bullish trade. Therefore, we have to hold off for a trade entry. We will reset our alerts and move forward with the backtest Figure 3.
Currently, the Kijun Sen is 1. Therefore, all we need to do is reset our alerts and move forward with the backtest Figure 3. On July 30, , tile bearish alert was triggered Figure 3. Some may be wondering why we chose the bearish alert where we did. Why was it not lower?
That is a valid question and Figure 3. The reason is that price is from Lhe Kijun Sen, which is outside our trading plan limits. On August 6, , the bearish alert was triggered Figure 3. The Ichimoku indicators are good for a bearish trade. The price versus Kijun Sen distance, which has been the problem most of the time, is a problem again.
We need it to equalize more so we will wait a little while longer. The alerts have been reset and shown in Figure 3. On August 7, , Ille bearish alert was triggered Figure 3. In examining the Ichimoku indicators, we are set to enter a bearish trade. Notice that the Kijun Sen is pointing downward along with the Tenkan Sen even with the far distance between price and Kijun Sen.
We will set up the alerts and move forward Figure 3. On August 8, , price moved down drastically and triggered our bearish alert Figure 3. We have not been able to enter Ule trade because of price distance from Kijun Sen and now this distance as gone further. Maybe we should have opened up the distance when Kijun Sen this down as an optimization and try it later. For now, we have an active and Tenkan Sen pointed in the same direction of the trend. Therefore, we will reset Ule alerts and they are illustrated in Figure 3.
You can enter the trend trade on a major pullback which is what we will try to do. The chart now shows that a possible pullback may be coming very soon. We do not know if it will be a minor pullback or a major pullback. Only time will give us this answer. On September 26, , we were [mally able to set the bearish alert.
We have chosen the bearish alert at the Kijun Sen. Since price has gone above Kijun Sen, two scenarios now exist. Either the trend has reversed or a major pullback is occurring. When the trend continues, price will have to cross over the Kijun Sen so we are setting up an alert at that location. Ichimoku Backresting -. Therefore, if our entry "sits out" there for a while, we will change it to an alert again.
On September 30, , we entered the bearish lrade Figure 3. Price gapped down hard so that it got us to Preserve mode right away. This means we should now start to use the Tenkan Sen as a stop. However, there is one problem and that is the Tenkan Sen is higher than the Kijun Sen so the Kijun Sen is a tighter stop for now. On October 16, , the bearish alert was triggered Figure 3.
The Ichimoku indicators look good but the distance between price and Kijun Sen is too huge. Therefore, we reset our alerts and wait Figure 3. We got very close to hitting our alert but it did not trigger. Just like before, price is still far from the Kijun Sen so we have to move on with our alerts. This issue was that price was too far away from the Kijun Sen. In other words, it was greater Ulan pips.
The chart in Figure 3. However, price is too far from the Kijun Sen. It allows us to have a profitable two years. There are many different optimization techniques we can try to increase the profit drastically. In fact, if you think about it, there was one rule that kept us out of many major profits. The rule was where Kijun Sen and price have to be within pips of each other. If this rule can be altered, we may be able to double our profits over the two years' historical backtest.
It gives the trader the "complete picture" on the trading plan that was used for the backtest. The goal of the analysis is to analyze the results for a particular backtest period. Markets change dai l y so there is no complete answer. We have to adapt to the market, otherwise it will eliminate us. Table 4. We were profitable so that is a goodfil'st start. The problem you should see right away with this trading plan is that there was a lot of risk compared to profits.
The goals of a trend system are to minimize losses when you are wrong and maximize profits when you are right. If not, you have to wait for it to equalize and come back into range. Therefore, the ratio needs to be below 1. Many people gauge a trading plan by winning trades versus losing trades. Do you think this is true'? Can you believe that a system can be only 40 percent correct but can produce huge profits? Is Ulat unusual? In the last chapter of the book, we discuss this fmther.
Believe it or not, the winning percentage really does not matter. It is Ule amount of profit that winning trades produce compared to the amount of losses from the losing trades. Now that we have the final results of our backtest in an organized aUf manner as shown in Table 4. The first task we take on is to minimize losses. We had two losses in our original trading plan. The first is and the second is The loss of is 21 percent of 1,, the total profit.
This is a huge number compared to the two-year profit. We need to do one of three things here. The first is to tum the loss into a profit. For that trade, the max profit is only This is not much, so Ulis first option does not look feasible. The second option is to eliminate the loss completely. Our trading plan was focused on keeping our maximum loss per trade i above the to pips. This trade had an entry risk of pips, which s pip value.
Tllis was due to the entry buffer. We allowed the trade because our trading plan did not include the buffer in the bullish and bearish rule. If we adjust our trading plan to include the entry buffer on the rule Ulen we can eliminate the trade completely. We achieved our goal of elinlinating the trade completely.
The second option worked out really well. The third option is to minimize the loss. I really cannot think of any way we can reduce Otis loss so this option does not exist. If we had a couple of big losses, it would take longer to determine the cause. In another words, we needed to make sure that a trading plan rule did not eliminate some good trades.
A good way to do this is to look for "holes" in consistency among the trades in Table 4. If you look at the results in Table 4. After May , we did not make a trade lUltil September. This did not fit the normal sequence Ulere could be some really good trades during this time period. If this time of a trade every two months. Therefore, we need to find out why because period shows consolidation then there willbe no good trades.
However, if Ule charts illustrate that it was a trending period, than there is a rule that is inhibiting the good trend trades. Therefore, the optimization we are going to try is to eliminate this rule from the trading plan on both the bullish and the bearish side.
With this rule change, we now have a complete dataset for all the trades during a trend period. Now we can start to look at minimizing our losses and maximizing our profits. We first start by minimizing our losses because losses need to be addressed before looking at the winning trades.
We minimized our losses before by changing the trading plan according to Table 4. However, we really cannot do that now because we eliminated Ulat rule completely. After looking at the results n i Table 4. Therefore, we can reduce our entry risk completely.
Let us alter our trading plan to now include a maximum entry risk of pips. In We have reduced our risk without altering our trading plan drastically. There were many trades that got to a minimum of pips but we "claimed" much less than that value. Therefore, we are going to add the following rule to our trading plan: If a pip profit is achieved, exit the trade. If the results look good then we will backtest it. This is why you do not have any exit dates for some trades.
This is not percent accurate because we exit out at a profit of and more trades could exist now because we can reenter. If you compare the results from Table 4. Now we have to backtest with this new trading plan to make sure the actual backlest results match the estimated backtest results. We leave you to backtest everything again and verify your results on our web site www.
Our optimization has worked really well. Just tltink that this is just Ule beginning of the optimization. There are many other things you can try. Here is a list of seven of them: 1. Increase the Preserve value from to , , , Increase the Bullish Exit buffer to 50, 60, Increase the Bearish Exit buffer to 40, 50, 60, For continuation trend trades always use the Tenkan Sen for a stop instead of Kijun Sen.
Always use Ule Tenkan Sen as a stop. Always use Ule Kijun Sen as a stop with no Preserve mode. The fmal strategy that we have derived is the "foundation strategy. Through other optimization techniques, you can capture more of the max profits, further minimize losses, and maximize profits. Future books will discuss advance optimization techniques. A breakdown of four of the advanced optimization techniques we discuss in the future are: I. Chart Patterns 2.
Multi-Time Frame Analysis Entry Strategies -t. Ichimoku Strategies n this chapter, I discuss other Ichimoku strategies. What J mean by destructive is that people will not concentrate on one strategy only. They will look at allstrategies at one time and try to see which one is best for them at the beginning stage of leaming Ichimoku.
Instead of backtesting with one strategy, they will take all Ule strategies and try to backtest all at once in order to see which one is the best. This strategy is the "foundation" for the other strategies. Without going through the steps laid out in the previous chapters, there is no way you will be able to successfully trade the other advanced strategies. Here are five of the Idtimoku strategies: I. Ideal Ichimoku Strategy 2.
Kijun Sen Cross Strategy Kumo Cloud Breakout Strategy 5. I briefly go through and explain each strategy and the rules behind them. Different Ichimoku traders have different rule sets for each strategy. The rule sets that are outlined are the ones that I have experience with in both historical and live trading modes.
I view this as the "highest probability" strategy because it is a safe, conservative strategy. The goal of tJlis strategy is to get 30 percent to 40 percent of the trend. You will not get the beginning of the trend and most likely you will not get the end of the trend. In fact, depending on your trading plan, you will most likely get a losing trade when the trend is about to be over. This strategy this uses allthe Ichimoku indicators so you must understand all the indicators and how well tJley work togeUler in order to trade strategy.
I also call this the "foundation strategy. Traders use this crossover in conjunction with the period simple moving averages SMA. The period SMA controls the direction of the trade. This strategy has been used and traded for many years.
In fact, many other strategies have been created from this one. The Tenkan SenlKijun Sen crossover strategy is sinlilar to t. For currencies, I use a value of 50 pips below the Kuma Cloud as long as the cloud is a thin cloud. I want a thin cloud because I am assuming that price is going to go right through the cloud to the upside. If they are, it should be a thick cloud. For currencies, I use a value of 50 pips above the Kuma Cloud as long as the cloud is a thin cloud. I want a thin cloud because I am assuming that price is going to go right through the cloud to the downside.
Figure 5. This is an interesting chart because with the "naked eye," the chart looks "ugly. URI': 5. Therefore, you can set up for a bullish entry. J have not given you any infommtion for the trading plan such as what stops to use, what is tile Preserve mode value if there is one at all, and so forth.
For each of these advance Ichimoku strategies, this will need to be done. I will not provide you full details or an example of the trading plan for these advance strategies in this book. The reason for this is that in order to understand and use the advanced strategies, the basic strategy must be mastered.
You need to learn the entire process and how to do it because nothing is "definite. This chart looks a lot "cleaner" than the previous example. All the rules are good so a bullish entry can be set up with no problems at alL Figure 5. U you used the "ideal strategy" then you would have just been a little positive.
However, there are consequences for doing so. You will leam them as you backtest your trading plan with these strategies. Ichimoku Strategies 1 53 F". GUH": 5. The other strategies can be used for day trading but this strategy is ideal because it has Ule lowest risk factor compared to all the other strategies. In order to get the lower risk factor, you have to give up something else.
Can anyone guess what it is? Well, it is the probability of success. The probability of success is lower because you can get stopped out of a trade more often compared to the oUler strategies. The winlloss ratio for this strategy can be extremely high. If they are, it should be a Utick cloud. The Chikou Span is still bearish and within the Kuma Cloud. If we set up an entry above the major resistance value of 1. Ichimoku Strategies We may have a little difference on the entry price but it will not be Ulat different.
I do not like this strategy too This strategy is my least favorite strategy. Basically, you enter a trade as much because there are many times where prices break out of the Kumo Cloud and then the next bar or bars reverse right away. It was basically a "fake" break of a major support or resistance. If Uley are, it should be a thick cloud.
Notice that there were two breakouts that occurred for this instrument over a six-month time period. If you could not see the price bars after the breakout bar, do you think both breakouts look the same? The bar setup looks Ule same. Both had the Chikou Span in "open space. In theory, there is really no big difference. One was successful and the other one failed miserably. This strategy by itself is weak If you combined this strategy with others then it is strong.
To me, it is more of a time-based strategy. You can see from the charts where the Senkou A crossed Senkou B. Therefore, you can draw a vertica3 timeline on that crossover point. This then signifies a possible tuming point for tile trend or continuation of a trend. By itself, I do not think this strategy is powerful. We have placed a vertical llile on each cross and specified the type of crossover. Notice, none of the Senkou crossovers worked at all. This time, the bullish Senkou crossover worked and it worked really well.
If you observed Ule signals at the time of the crossover, all the other strategies showed entry signals, too. Isn't that interesting? This brings us to an interesting point. In going Uuough each strategy, we have noticed Ulat the high probability of success is seen when two or more strategies show entry signals in price close to each other.
In Figure 5. Notice Ulat the end result of the trade is Ulat the trend went for over 2, pips over a seven-month period. The reason is that it is the most complex element of Ichimoku. I write about it in this book because it has been mentioned in the Ichimoku discussion forum. In my trading, I do not use the lchimoku time elements. I use W. Gann's time elements instead. There are many similarities between the w. The weekends are nontrading days.
There is no right or wrong answer, believe it or not. So what do you do? Well, the best thing to do is make an assumption and Ulen base everything off it As long as you do not change the assumption, all the research is valid. The second assumption is that the Ichimoku time elements work mainly for the daily and weekly time frames.
Ichimoku Time Element Value Key Trading Number 9 17 26 33 42 51 65 76 83 97 1 01 1 72 time frames, but in my experience Uley are not too effective. Please prove it to yourself through backtests and chart analysis. Table 6. You can see these computations in Table 6. In some articles, you will notice that people have placed ranges around the key values. For instance, the first key Ichimoku time element s i 9. Some people will say Ule 9 is valid as long as the number is between 7 and II.
This is the range for values that make the Ichimoku time element 9 valid. Table G. Do you see the problem with Ule theory of ranges with the Ichimoku time elements shown in Table G. If you include the ranges with the Ichimoku time element, you cover almost all Ule numbers. There are more numbers covered than not covered so would it not be better to analyze the numbers not covered?
You will get a smaller sample size if you do that. For example, between 7 and 21, the only number not covered is How does that help? It is not useful at all. You will allow only one deviation before and after the time element but that is it. Figure G. The chart illustrates some Ichimoku time elements that were created with Ule values 9, 33, 43, and Notice that 43 is 1 off from 42 and 66 is 1 off from G5. How did you get these values?
How do you use the Ichimoku time elements? Let us go Ulfough the steps one by one in order to show how the Ichimoku time element influenced time. Next, place vertical lines at every price reversal. What is the definition of price reversal? Figure 6. One issue you may come across is when you have two price bars with the same high or same low at a price reversal point. Where do you place Ole vertical line?
There is no right or wrong answer for which bar. You will have to try both and see where the ,. GUHE ti. The first vertical line on the left in Figure 6. Once the vertical tines have been placed on the chart, proceed forward in trying all the different time values betweell the vertical lines. I would go in sequence. If the value equals one of the Ichimoku time values or is off by I then you keep that measurement. Next, you need to measure between Ule flrst vertical line and the third vertical line.
Last, you measure between the first vertical tine and the fourth vertical line. Keep alJ the measurements that equal one of the Ichimoku checking the flrst vertical line to all the future vertical lines i e the lines time values or are off by one. Now, you have completed Ule sequence of to the right of the line being measured against. Continue to do this until all the vertical lines have been measured against all Ule other vertical lines.
Take the time to do these measuremenlS completely. Do not take any shortcuts. You may have some values I do not have but do not worry about it There is no right or wrong answer. Notice how the price reversals matched the Tchimoku elements? The time values were accurate at the beginning of the downward trend but when the big trend occurred, over 18 weeks, there was really no match with the Ichimoku time elements.
Can this happen? Yes, it can happen more often than you will believe. The time elements indicate a possible price reversal. Time elements by themselves are not too valuable. Forex Club application How to add indicators and EAs on MetaTrader 5 on computers Read: Settle your transactions. The Forex Club - Tax 8 application is now available! Read: eToro Opinions and Review Social trading platform.
Read: Forex Club program - Tax version 7. Read: Trading Central - independent market analyzes [Review]. Problems and errors when using the machines on MetaTrader 4. How to connect an account to MyFxBook [Guide]. How to invest in dividend companies - stocks and ETFs How to invest in semiconductor companies?
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A downward trend, on the other hand, is a situation where the price of the instrument is under the Kumo cloud. Side trend - a situation where the price of the instrument is in the Kumo cloud. Support and resistance Rising trend: The upper edge of the Kumo cloud - the first level of support, The lower edge of the Kumo cloud - the second level of support. Downward trend: The upper edge of the Kumo cloud - the first level of support, The lower edge of the Kumo cloud - the second level of support.
Side trend: While the price is in the Kumo cloud, breaking the course through the top edge is the buy signal and the breaking through the bottom edge of the sales signal. Buy signals First degree: When the course breaks through Tenkan-Sen from below, When the rate breaks Kijun-Sen from below, When the course breaks through the bottom of the Kumo Cloud from below.
Second degree: Tenkan-Sen pierces Kijun-Sen from the bottom, The course raises the upper edge of the Kumo cloud from the bottom. Sales signals First degree: When the course breaks through Tenkan-Sen from above, When the course breaks through Kijun-Sen from above, When the course breaks through the top of the Kumo Cloud from above. Second degree: Tenkan-Sen pierce Kijun-Sen from the top, The course breaks the top edge of the Kumo cloud from the top.
Post in the category. About the Author. An active trader on the Forex market since Editor of the Forex Nawigator portal and editor-in-chief and co-creator of the ForexClub. Addicted to travel, motorbikes and parachuting.
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