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Ichimoku

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  • First Post: Mar 26, 2006 11:17am Mar 26, 2006 11:17am
I was discussing in another thread Charting packages and Lou said he did not think there had been much discussion about Ichimoku charting, So I thought I would bring it up in a new thread.

At this address, there is a complete description of it:

http://www.currencytradermag.com/u20sh.htm

You would need to subscripe, but it is free. It is in the March issue.

Enclosed is the math behind it.

Any thoughts as it pertains to FOREX?

SMJ
Attached Image
There's also a url below that actually shows what a chart looks like and how to interpret signals...

http://www.investopedia.com/articles.../04/072104.asp

Investopedia has some other cool stuff....a worthwhile site!
As I stated in another thread, but thought it is more appropriate here, I took the first indicator line the based on the median of the highest high and lowest low 9 periods back and applied it to a 7 period time frame and plotted it along side the 8MA in the 4 Hour VWB and it gave an excellent early warning of a direction change in the 8MA. The thing that caught my attention was I noticed it is not so lagging, being based on HHvs and LLvs not moving averages.
See the attached chart.

SMJ
Attached Image
I am surprised that there is not a lot more interest in this indicator.

It seems to me(after some manual backtesting) that it is one of the most reliable indicators available and if you use the trend direction along with a default Parabolic SAR and atleast 2 or 3 signals from the Ichimoku you can do very well over an extended time period.

I am currently still fine tuning my system and it looks to be very profitable indeed.

Look forward to making plenty pips with this baby.

Cheers
Hi Pipfetcher,

<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o> </o>

How is fetching the pips coming along with your system? I’m quite curious in your system. If I’m reading it correctly, you’ve combine VWB with Ichimoku + Parabolic SAR? What inputs have you configured for Ichimoku? What timeframes are you trading?

<o> </o>

I’ve noticed this works very good with the Yen pairs. I’ve not be so successful with Cable.

<o> </o>

Enjoy it
Hi Rsmit

You need to speak to SMJones about the system you are referring to.He is the one who combines Ichimoku with VWB.

I would also like to hear what he has to say on the subject.

As for the rest of your questions
How is fetching the pips coming along with your system?

It is coming along nicely.Eur / Yen 558 pips in last 2 months trading with just 1 standard lot.Eur / Usd has similar results.

What inputs have you configured for Ichimoku?
Default

What timeframes are you trading?
I trade the 4 hour time frames because I find them to be more consistent(less chop around the Kijun sen)than the 1 hour time frames.

Something else to add is that I use the FF Tunnel along with some discretion to determine the trade direction and my exits are based on Fib numbers(not the fib lines on the FF Tunnel but the actual numbers).

I dont trade the pound with this method as I think it is a bit to volatile for this system/model.

Cheers
Quoting smjones
I was discussing in another thread Charting packages and Lou said he did not think there had been much discussion about Ichimoku charting, So I thought I would bring it up in a new thread.

At this address, there is a complete description of it:

http://www.currencytradermag.com/u20sh.htm

You would need to subscripe, but it is free. It is in the March issue.

Enclosed is the math behind it.

Any thoughts as it pertains to FOREX?

SMJ
The link you provided is not a valid or it is not working now as I have tried it and I cant get anything.Can you repost it.
kolachi
Guys,
I'm really glad that thre is a thread dedicated to the Ichimoku indicator. It is one of the best indicators that I have found for trading the Forex. It looks like a mess when you first plot it, but all the information that you need is right up there on the screen. It is very simple to make trading decisions using this indicator. My experience with this indicator is a consistent 65% winning trades. This isn't as high as I would like it, but as I learn more about the indicator I'm sure it will go higher.

I'm hoping that we can get some really good discussions going on this topic. My goal is to create a Metratrader expert advisor that can do the trading for me. Hopefully I can pick up some great information from this thread.
HI EffectiveFX

I agree that the Ichimoku is one of the best indicators for forex.

65% winning trades is good with any system.

Are you demo trading with Ichimoku or are you trading live ?

What time frames do you use and which of the signals do you look for?

I trade on 4 hour time frames and only with the daily trend and my primary signals are the the Chinkou Span crossing the price action and the crossover of the Tenkan-Sen and Kijun-Sen.
I also have a Parabolic Sar(Default) and I try never to trade against it Except when the crossover is really strong and the market is close to support in case of a buy or close to resistance in case of a sell.

Do you trade the Ichimoku mechanically or do you use discretion ?

Which ever way you trade it I hope you make plenty $.
In case u haven't figure dit out yet. Go to:
http://www.currencytradermag.com/
and click on Back Issues (along the left hand side.)
and u can download the March issue.

Quoting kolachi
The link you provided is not a valid or it is not working now as I have tried it and I cant get anything.Can you repost it.
kolachi
In trading, there is no bullshit. You either make money or you don't.
Sorry guys this threead is so old the links are gone. In the 5 months or so since I started this thread. I have come to the conclusion that I like GMMAs better. Ichimoku for me did not add any thing to VWB in the long run. The more filters one puts on, sometimes does not improve performance... I suppose that is why I did not continue the thread.. Sometime the magic doen't work... LOL


Scott
Oops I forgot to mention something else.

If I do trade against the FF Tunnel trend it is only when the Price Action moves through the Senkou Span B and only if the Senkou Span B was at the farthest side of the cloud.

In other words if the Price was above the cloud and the Senkou Span B was at the bottom of the cloud I will initiate a short position if the price moves through the Senkou Span B and if the other signals agree that it is a bearish move.If the price was above the cloud and the Senkou Span B was at the top of the cloud I will not trade if the price moves through the cloud because in those circumstances the markets are usually very choppy.

Hope it makes sense

<TABLE class=tborder cellSpacing=1 cellPadding=6 width="100%" align=center border=0><TBODY><TR title="Post 85329" vAlign=top><TD class=alt1 align=middle width=125>smjones</TD><TD class=alt2>Sorry guys this threead is so old the links are gone. In the 5 months or so since I started this thread. I have come to the conclusion that I like GMMAs better. Ichimoku for me did not add any thing to VWB in the long run. The more filters one puts on, sometimes does not improve performance... I suppose that is why I did not continue the thread.. Sometime the magic doen't work... LOL


Scott</TD></TR></TBODY></TABLE>

Please stick around and maybe some of my magic can rub of on you and some of yours can rub of on me.Hope that doesn't sound kinky.lol

Cheers
Sounds good. I am not going anywhere. I am always interested in improving performance.


Scott

Quoting Pipfetcher
Oops I forgot to mention something else.

If I do trade against the FF Tunnel trend it is only when the Price Action moves through the Senkou Span B and only if the Senkou Span B was at the farthest side of the cloud.

In other words if the Price was above the cloud and the Senkou Span B was at the bottom of the cloud I will initiate a short position if the price moves through the Senkou Span B and if the other signals agree that it is a bearish move.If the price was above the cloud and the Senkou Span B was at the top of the cloud I will not trade if the price moves through the cloud because in those circumstances the markets are usually very choppy.

Hope it makes sense

<TABLE class=tborder cellSpacing=1 cellPadding=6 width="100%" align=center border=0><TBODY><TR title="Post 85329" vAlign=top><TD class=alt1 align=middle width=125>smjones</TD><TD class=alt2>Sorry guys this threead is so old the links are gone. In the 5 months or so since I started this thread. I have come to the conclusion that I like GMMAs better. Ichimoku for me did not add any thing to VWB in the long run. The more filters one puts on, sometimes does not improve performance... I suppose that is why I did not continue the thread.. Sometime the magic doen't work... LOL



Scott
</TD></TR></TBODY></TABLE>

Please stick around and maybe some of my magic can rub of on you and some of yours can rub of on me.Hope that doesn't sound kinky.lol

Cheers
Pipfetcher,

<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o> </o>

I agree with all your entry points. I can see the trades develop. The problem with this indicator (and maybe more me) is I can’t see clear exit indications. I can see the price move 50, 80 sometime 200 pips, but then with no warning it drops.

<o> </o>

Do you have some ideas on Stops and exits? You’ve mentioned fib’s? Do you know the LeftBrainTrader system? They use fibs in a very interesting vertical way. Do you use something similar to take profit?

<o> </o>

A part from that I like the indicator very much, but I think you need to combine it with something to indicate stops and exits – your thoughts would be appreciated

<o> </o>

Eur/Jen is in a nice trend, are you in from the beginning? Hope you’re riding it nicely!
Quoting smjones
Sounds good. I am not going anywhere. I am always interested in improving performance.


Scott
Mr. Jones, nice to have you back!

If we mention something you’ve tried and tested, please feel free to put us right. That way we won’t waste time and energy.

I’m sorry to hear you’ve dropped this though. Hope its worth it getting into it again?
By the way, here is a trading system I found on another forum. Heluva complicated to me, but maybe someone in this thread can find it useful.

rsmit<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o></o>
Attached File(s)
File Type: doc Ichimoku system.doc   234 KB | 4,200 downloads
Quoting Pipfetcher
HI EffectiveFX

I agree that the Ichimoku is one of the best indicators for forex.

65% winning trades is good with any system.

Are you demo trading with Ichimoku or are you trading live ?

What time frames do you use and which of the signals do you look for?

I trade on 4 hour time frames and only with the daily trend and my primary signals are the the Chinkou Span crossing the price action and the crossover of the Tenkan-Sen and Kijun-Sen.
I also have a Parabolic Sar(Default) and I try never to trade against it Except when the crossover is really strong and the market is close to support in case of a buy or close to resistance in case of a sell.

Do you trade the Ichimoku mechanically or do you use discretion ?

Which ever way you trade it I hope you make plenty $.

Pipfetcher,

I generally use the Daily/weekly charts to determine the major trend and the support areas and the lower timeframes such as 4hr/1hr for determining entries. Most of the time, I use the 30 minute charts because I tend to trade the news.

I find that it is better to guage your exits using a lower timeframes such as the 15 minute chart.

I also use a stochastic (8,3,3) to confirm my entries.

Ichimoku does tend to produce many false signals when a pair is not trending, I find this the most difficult part of using this indicator. I'mm still working on perfecting my system.
<TABLE class=tborder cellSpacing=1 cellPadding=6 width="100%" align=center border=0><TBODY><TR title="Post 85463" vAlign=top><TD class=alt1 align=middle width=125>rsmit</TD><TD class=alt2>Pipfetcher,

<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o></o>

I agree with all your entry points. I can see the trades develop. The problem with this indicator (and maybe more me) is I can’t see clear exit indications. I can see the price move 50, 80 sometime 200 pips, but then with no warning it drops.

<o></o>

Do you have some ideas on Stops and exits? You’ve mentioned fib’s? Do you know the LeftBrainTrader system? They use fibs in a very interesting vertical way. Do you use something similar to take profit?

<o></o>

A part from that I like the indicator very much, but I think you need to combine it with something to indicate stops and exits – your thoughts would be appreciated

<o></o>

Eur/Jen is in a nice trend, are you in from the beginning? Hope you’re riding it nicely! </TD></TR></TBODY></TABLE>

Hi Rsmit

I take profits when the trade is in profits by 55,89,144,233,377 etc(fib numbers.)depending on the currency pair that I am trading aswell as the timeframe that I am trading and the entry method I used to get into the trade.

Stoplosses are as the saying goes more of an art than a science but as a basic guideline I use the Chinkou Span.

If you take a close look at the Chinkou Span you will see that there are periods when it flattens out or chops up and down and these levels can be used as support and resistance or stops and exits.The Chinkou Span only reflects current price moved 26 periods back so you will also be able to see these levels in the price action too.

Another option for exits could be to switch to a smaller timeframe once you start thinking of taking profits and then wait for an exit signal on that timeframe.

I don't know the leftbraintrader system but it might be worth a look.Please tell me about it.

Eur/Yen has been going nicely for sometime now and I have been in and out of it a couple of times.

Cheers
Pipfetcher,

I generally use the Daily/weekly charts to determine the major trend and the support areas and the lower timeframes such as 4hr/1hr for determining entries. Most of the time, I use the 30 minute charts because I tend to trade the news.

I find that it is better to guage your exits using a lower timeframes such as the 15 minute chart.

I also use a stochastic (8,3,3) to confirm my entries.

Ichimoku does tend to produce many false signals when a pair is not trending, I find this the most difficult part of using this indicator. I'mm still working on perfecting my system.

EffectiveFX

Thanx for the reply.

Do you wait for the Chinkou Span to cross the price action before you initiate the trade because that can sort out many of the false signals.

I will never trade if the Chinkou Span is not on the correct side of the price action but maybe that's just me.

Cheers
Looks like this thread is drying up.

Anyone interested in putting together the rules for a trading system based on Ichimoku?

This is a tough indicator to use due to the scant amount of information available.
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