trading_ichimoku

                                  Ichimoku system

PART 1
The term 'Ichimoku', in Japanese means 'a look'. The Ichimoku is considered to be an autonomous system because they needed additional indicators - includes everything that most traders would need to take investment decisions. How we can use for our staff trading;

The Ichimoku is a trading system originally developed by Japanese journalist Goichi Hosada - while trying to discover the ultimate indicator that could provide a wealth of data (analysis) at a glance. The term Ichimoku, literally means 'look' in Japanese. The Ichimoku is considered to be an autonomous system since it requires additional indicators - includes everything that most traders will need to take investment decisions. Ichimoku system is widely used in Japanese trading rooms, giving many the impression that the only methods for identifying support and resistance, making this system very suitable for couples GBP / JPY, EUR / JPY, USD / JPY. Several elements of Ichimoku - and can make the graph showing quite complicated. In this article we are going to mention the key points of Ichimoku and how traders can use to analyze the markets.



Splitting baseline

in core Ichimoku are the lines Tenkan-Sen and Kijun-Sen (referred to as Tenkan and Kijun). These two lines are the center of the Ichimoku system and can be treated as the intersection that separates the upward and the downward trend.
The Tenkan and Kijun are Moving Average. The only difference compared to normal averages is that they calculate the 'Average Price' every candle compared to the closing price (just like a simple or exponential moving average). This causes the line to appear jagged (unlike the normalization which achieves an average is calculated in the closure).
The Tenkan is usually the first element to be used by the trader when applying Ichimoku in a chart. This is a Mobile Average 9 years and we regard him as a "primer" of the system - since this is meaning that takes place all the action that is preceded by the Ichimoku. When applying Ichimoku do this line green to stand out and be very clear when an incision.
The Kijun is usually the second element used and is a MA 26 periods (exponential calculated on the average). We can consider the Kijun as the baseline. When the line intersects Tenkan upstream and upwards baseline, it may be regarded as signal market. When Tenkan crosses the main line down, we can consider it as sell signal.
The remaining indicators within the Ichimoku helps us identify the 'strength' of the signal ..
For now, it is important to be familiar with the intersection of the row trigger to baseline (Trigger / Base Line Crossover).If you are not yet comfortable with this section, apply it on the chart and make a check with the existing data in the chart to understand how it works. while advancing in learning Trigger / Base Line Crossover, which could help the organization of the index with an easy way that will clearly depicted in the chart this section. For the rest of this article, we use 'green' for the line Tenkan and 'Blue' for the line Kijun. Once completed, the graphs should look roughly similar to what you see below: 

Now that we have fully Ichimoku applied to graphs, we can see the power of the intersection between the green and the blue line.
For now, ignore anything else is on the graph except Green (Trigger) and Blue (Base Line) line. For example, notice that in the graph below we have an upward incision occurred on 11/05/2009 in the pair GBP / JPY. I made ​​the partition graph where the Green line (trigger) intersects the upward Blue line (base line) indicating the anode can start to pair.

Then we can move forward in time, with the arrow on the keyboard, seeing how this hypothetical market position could have evolved.

After checking how it could have evolved this box, we see that this upward break of the Green Line (trigger line) with Blue (base line) was immediately before a rise to 1000 + pips rate GBP / JPY.
In Then we can move on to the next section, which if you look at the chart above, you will notice that the downward section (green line crosses from top to bottom the blue) occurred after approached the high of 162.50 yen. the diagram, we can see how we have evolved this hypothetical sell signal.
The graph below I have marked the point where the signal was given sale, after declining section. Note that this signal is not able to be as profitable as the previous, but once given the signal, the pair GBP / JPY fell 700 pips.

The goal of this manual control signals is to be able to understand what happens when the Trigger Line (green line) intersects with the Base Line (baseline). These are two of the most basic elements of Ichimoku and is the core of the system. Everything else is included in Ichimoku helps us to interpret the signals and MARKET SALE, show how powerful they can be.

If you have trouble remembering which line is what, think as follows: "Tenkan = Signal (trigger) and Baseline = Blue."


                                                               PART 2nd

The part of the Ichimoku escaping completely from us when we apply it in our graphs is the area known as 'the cloud' or 'Kumo' as it is called in Japanese. Is one of the areas of this index makes it particularly interesting field of study. Is constantly changing in size and in width.

The Kumo in fact consists of two lines. The area between the two lines is shaded and is considered to be a moving range of support during upward trends and resistance during downward trends. Many traders will look to the Kumo to place the stop for trades placed by the intersection of Green to Blue Line (Trigger / Base Line Crossover).
One of the most important tasks of Kumo is that it can help traders with its ability to indicate the trend of currency pairs.When a couple has uptrend making higher highs and higher lows, the Kumo will act as support - remains below the price as the pair is trading higher.

And when a couple negotiate downwards making lower highs and lower lows, the Kumo acts as resistance remained above the price as the pair moves lower. These periods will be displayed in the chart RED default (please see below)

One of the most unique aspects about Kumo, is that it is made ​​in advance for 26 periods. If you observe the current values ​​in a graph while applying the Ichimoku will notice that for 26 years ahead, the Kumo is already designed and waiting for prices. however, keep in mind that it has absolutely no predictive value.

                                       How to interpret the Kumo

Now that we know what is Kumo, let's discuss how they use the traders.
One of the most valuable functions of Kumo is its ability to indicate to traders the potential power of cleavage Green and Blue line (Trigger / Base line crossover). When this happens the split traders will observe the location in relation to the Kumo and rate the signal depending on the force. Let's look at an example together.
The following chart GBP / USD, there are three upward divisions, all marked with a red circle.
Lets look at each one of the signals to see how traders are generally interpreted these divisions.

At the first break upward (bull cross 1), observe that both the price and the break is below the Kumo.

When this happens the break is at the end of a downtrend. Traders are not sure whether the trend will change in upward or downward if the trend will prevail.
For this reason, traders often find it a weak signal. If the inversion carried out, the potential reward could be significant.But such reversals do not always happen. Compliance risks by placing stop orders is extremely important for these signals.
during the second anodic decomposition (bull cross 2), the split and the price is within the Kumo, as is the division (Green degrades Blue ).

Generally traders consider these decays Green with Blue Line, occurring between the Kumo, it is moderate strength.
Where the third upward break (Bull cross 3) occur, the price and the break is above the Kumo, traders will generally find the signal much as possible.

The reason that traders consider the sign of 'bull cross 3' is so powerful is because the deal.
Remember, if the price is above the Kumo, traders will see the couple as if they rise. When the Green line crosses upward from below the Blue line (which is buying signal) and the price is above the Kumo (positive environment), traders place orders MARKET considering that breaking up the green with the blue line (Trigger / Base line crossover) is very strong.
Exactly the opposite is true for signals SALE. Downward splits occurring below the Kumo, generally regarded as 'very strong' because, once again, this is the deal. Values ​​below the Kumo, indicating pessimism and a declining division in accordance with the agreement will make the trader to consider that the signal he wants is 'very strong'. PTOTIKES splits occurring above the Kumo considered weak.
 

How to use signal strength
Now that we know how to use the Kumo when we take a break Green with Blue Line, let's discuss the best known ways in which traders try to benefit from the 'strength' of the signal produced by the Ichimoku. 
A well-known method for this includes the size of the trade made ​​by traders. 
When generating a weak signal, traders can potentially consider to open a position for 1 lot . 
When produced a moderate signal, traders can look to open a place for 2 lots. 
When generating a strong signal, traders can look to open a place for 3 lots. 
With this method, traders will undertake to open larger positions for signals that they feel is strongest. Others traders can choose to take only the 'very strong' signals, according to the agreement (ANODIKES splits over the Kumo, or PTOTIKES divisions below the Kumo). Now that we know how to integrate signal strength, we can make a check (back test) in the same way that we made ​​in the previous lesson. Going back in time and then going forward one candle at a time to observe the way in which the couple negotiates after each signal, from the above, that is produced. 

                                              The Art of Ichimoku, Part 3

In the previous two articles on Ichimoku, saw cutting the Tenkan and Kijun (reported as being Trigger / Base Line crossover or intersection green and blue lines), and the 'Kumo' or 'The Cloud . " 
In this piece we will incorporate the final part of this exciting ratio - known as Chinkou-Span, or 'Potion'. 'Potion', as I call it can function in a similar way as the Kumo, ie that can be help us determine how 'possible' is the signal produced by the intersection of Green and Blue line. The Chinkou-Span (here referred to as 'Filter') is the current value displayed 26 years ago. That's it. Does not require scientific calculations or complicated mathematics is merely a repetition of the current value shown 26 based on 26 times in the past. The usefulness of 'Filter' is to show who is the current price in relation to that was 26 years ago. If the value of this wax is higher than the price of the candle of 26 years ago, is generally regarded as an anode (the value is higher than 26 years ago).

If the value of this wax is less than the price of the candle of 26 years ago, is generally considered as a downward (the value is lower than 26 years ago).

                       
Let's look at some examples to see how traders use 'filter' in their trading decisions.
In the following example, note that an upward break has occurred over Kumo.

If you remember from the previous lesson, we learned that this is a signal MARKET which traders are generally could interpret as 'very strong' because of the AGREEMENT between the incision and the site that occurred in connection with the Kumo. Now we can integrate the 'Filter' in the strategy, we can observe that this buying signal is potentially much stronger than you might initially have thought - as evidenced by the fact that the 'Filter' is above the price it was 26 years ago. This indicates that this trend may be too strong upward and very favorable positions PURCHASE. 's traders could interpret this signal as 'extremely strong' and now the Kumo and 'Filter' confirm Buyer signal. Quite the opposite could be related to the case for release SALE. PTOTIKES divisions Green with Blue Line (Trigger / Base Line Crossovers) below the Kumo become quite powerful with the confirmation that the 'Filter' below the price it was 26 years ago. Lets look at an example where 'Filter 'could potentially keep us from getting into positions that may not be wanted. In the following chart, notice that there are two divisions of the Green and the Blue Line that occur above the picture.

Observe the first signal, which could be bearish signal as there is downward break.
This is above the Kumo and 'filter' is also above the Kumo, indicating both bull markets. downward The signal we received AL AGREES with the bull market we see and the Kumo and the 'Filter.' And as you can see from the chart, choose to do SELLERS at this point will not work optimally. however, if you notice the second signal given later you will see that we have an upward break.

At second signal, we AGREEMENT: The upward break with the upward state of Kumo (the price is above the Kumo) and 'Filter' is above the price at the time of signal .
's traders could consider this buyer brand that is 'extremely strong' because there is agreement between the brand, Kumo and the filter.
Because the 'Filter' is made ​​based on 26 years behind the current rate, manual control index can be a challenge.However, a procedure often used by traders to familiarize themselves with the 'Filter' is to try to fake accounts (demo), where depending on how strong the signal is chosen and lots. ANODIKES For example splits Below the Kumo and 'filter' below the price 26 periods - Weak signal (1 lot) Splitting between Kumo, 'Filter' in Kumo - Average mark (2 lots)above the Kumo and 'Filter' above the price 26 periods - Very strong signal (3 lots) In PTOTIKES splits Over Kumo and 'filter' below the price 26 periods - Weak signal (1 lot) Split happens in Kumo, 'Filter' in Kumo - Moderate signal (2 lots) Below the Kumo and 'filter' below Kumo - Very strong (3 lots)