ICHIMORKG ANALYSIS & STRATEGIES The Visual Guide to Spot the Trends in Stock Market, Cryptocurrency and Forex Using Technical Analysis and Cloud Charts CHARLES G. KOONITZPublished by Tripod Solutions Inc. Copyright © 2019 by Charles G. Koonitz All rights reserved. No part of this book may be reproduced, stored in a retrieval system, or transmitted in any form or by any other means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written express permission of the publisher and copyright owner. Unauthorized duplication of this material in any form is strictly prohibited. Lawbreakers will be prosecuted to the fullest extent of the jurisprudence. Disclaimer The limit of liability/disclaimer of warranty: The advice and strategies contained herein may not be suitable for your situation. You should consult a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages. Charts generated with Stockcharts.com and Trading View Follow Koonitz at Twitter: @JumpyStocks ISBN : 978-1-989118-29-0 Ebook First edition: July 2019TABLE OF CONTENTS PREFACE INTRODUCTION CHAPTER 1 - THE BASICS OF ICHIMOKU. Three Concepts for Ichimoku Functionalities of Ichi Equilibrium or Trend Advantages of Ichimoku Ichimoku Preview . Chart Provi CHAPTER 2 - THE BASICS OF TECHNICAL ANALYSIS Evolution of Stock Charts Time Frame and Trading Style Support and Resistance The Market Trend The Importance of Volume Chart Patterns Leading and Lagging Indicators Japanese Candlestick Patterns Divergences The Control of Emotions CHAPTER 3 - THE COMPONENTS OF ICHIMOKU Distinguish Alert from Trading SignalConversion Line (Tenkan-Sen’ Base Line (Kijun-Sen. Leading Span A (Senkou Span A) Leading Span B (Senkou Span B) Lagging Span (Chikou Span Cloud (Kumo) Ichimoku Principles CHAPTER 4 - INTERPRETATION OF THE ICHIMOKU SYSTEM Observation The Clarity of the Curves Number Theory Three Horizons of Time The Mysterious Cloud Fibonacci Numbers Protection Against Losses Important Reminders CHAPTER 5 - ICHIMOKU STRATEGIES Conversion Line/Base Line Cross Strategy Base Line Cross Strategy Cloud Breakout Strategy Lagging Span/Price Cross Strategy Lagging Span/Cloud Cross Strategy Important Reminders CHAPTER 6 - TRIGGER SIGNALS FASTER Analysis of a Bullish Reversal Analysis of a Bearish Reversal CHAPTER 7 - THE TRIPLE SCREEN TECHNIQUE vements sous cron tatourHow to Determine Time Frames How to Use the Triple Screen Technique CHAPTER 9 - TRADING RULES The Preliminary Trading Trading Rules for Buying Trading Rules for Selling Trading Rules for Short-Selling Trading Rules to Close Short Position Trading Traps to Avoid CHAPTER 10 - ICHIMOKU FOR EVERY MARKETS: Bitcoin Precious Metals Euro/Dollar CHAPTER 11 - THE UNEXPLORED AREA CONCLUSION GLOSSARY BIBLIOGRAPHY OF THE AUTHOR REFERENCES vements sous cron tatourPREFACE My start on the stock markets coincides with the arrival of the Internet, which opened the door to stock market investing. Finally, the trader no longer needed an intermediary to place his orders. At the same time, stock chart providers began to invade the web. My university education in Administration introduced me to stock market investing, without going into the details of technical analysis. Because of a result of research, | enrolled in training focused on Japanese stock market indicators and candlesticks. It was a revelation to me and many of my colleagues. Since then, technical analysis has taken over investments that were once based on the reputation of a company. The use of many indicators has reinforced my investment decisions and reduced financial risk. Entry and exit strategies have replaced investments based on emotions, and I am constantly on the lookout for new features to improve my trading. For those with modest experience in technical analysis, do you have the vague impression that your charts are overloaded with indicators? Do the graphics occupy too much space and height? Do you find it hard to scroll through the contents? Do you have an overview of the situation? Are you tired of changing the settings of the indicators according to situations or time horizons? If you answer yes to these questions, then Ichimoku is for you. I discovered Ichimoku, thanks to a colleague who had done an internship at an investment company in Japan. Like most uninitiated, I found the Ichimoku confusing by its bizarre presentation. I took the time to explore this new method of market analysis, without neglecting the indicators I had been using for two decades. Then one day, the click happened; it was my second revelation. An extraordinary breakthrough that makes it easy to identify neutral, bullish, and bearish areas. Well aware that Ichimoku does not attract as much attention as the classic Western indicators, I have seen over the years a craze more and more felt. With the enthusiasm generated by Japanese candlesticks in the ’90s, it is Ichimoku’s turn to make a major breakthrough in the world of technical analysis. Traders in Japan and traders in the Asian and Forex markets rely exclusively on the Ichimoku system for their analysis. Having already published some books on technical analysis, it was enough for me to embark on this new project. | have made a point of producing a book thatis intended primarily for the uninitiated and also for traders who want to discover another way to analyze markets. | opted for a large-format book to highlight the illustrations and the many graphics all in color. I wrote Ichimoku Analysis & Strategies for the pleasure of producing the book I would have liked to have in my early days in technical analysis. Know that I have nothing to sell; no training or subscription. I strongly urge you to consider Ichimoku to do your analysis for any market: Bitcoin, currencies, index funds, Forex, commodities, stocks. You will see the simplicity of the system in identifying areas of disturbance that prevent the price from continuing to climb. You will find yourself putting aside the indicators you have worked with for many years. Charles G. KoonitzINTRODUCTION It was at the end of the 19th century that the first major stock market theories appeared in the West: Dow’s theory by Charles Dow, Elliott’s theory of waves by Ralph N. Elliott, and William’s theory of angles by William D. Gann. These theories have led mathematicians to create indicators that facilitate market monitoring and to obtain buying and selling signals. Finally, the investor could fall back on technical tools before investing in the stock markets. The arrival of computers has changed the reality of trading. Over the years, traders have witnessed an explosion of new types of charts and technical indicators, more different from each other. Some chart formats include data that adds to the action, revealing a rather unusual aspect but still useful for decision- making. Western traders were far from suspecting that those in the East were also developing new tools. After the entry into force of the Japanese candlesticks in the '90s, Ichimoku made its appearance in the West in the early 2000s. Ichimoku, but what a funny name for a trading system! This system has multiple denominations: Ichimoku, Ichimoku Charts, or Ichimoku Cloud. The full name of this technique is Ichimoku Kinko Hyo, which translates as follows: © Ichimoku means ‘one glance’ © Kinko means ‘equilibrium’ © Hyo means ‘chart’ The union of these three words means “one-glance equilibrium chart.” One look and you will be able to identify the trend and potential crossings by the other indicators. This description is significant to the simplicity of the system. Unlike conventional indicators that stack one above the other and paralyze the trader’s analysis, the Ichimoku has only one window. Some will say with reason: “Why use another system when we already have access to more than 150 indicators?” Several indicators have similarities in form, and others generate signals that bring nothing new. The model developed by Ichimoku is different from what exists on the market. The beauty of the system lies in the fact that the approach remains the same at any time, regardless of the stock or index analyzed. Bad timing is the main cause of failure in trading, The trader buys too early, sellstoo late. Even worse, the trader invests in a congestion zone when it is impossible to predict market trajectories. The secret of effective trading lies in identifying the trend, and it is the strength of Ichimoku. Despite the effectiveness of the system, I have no intention of treating Ichimoku as if it happens in a vacuum. Indicators or classic patterns will always have their places, no matter what trading system is used. To help beginners in technical analysis, we will provide an overview of the basic concepts that will benefit the understanding of the Ichimoku system. We will see in detail the six components of Ichimoku that are dependent on each other. Each element can generate alerts, but the impact will be less compared to the strength of the group. We will also see the structure of an Ichimoku chart and the traps set by the financial markets. A comprehensive chapter focuses on five simple strategies that feature Ichimoku indicators. Strategies combine components and conditions that generate signals of varying intensity and are tabulated for later reference. We will see some techniques to increase signal quality and speed up the triggering of alerts. A chapter will be devoted to the combination of Ichimoku and classical indicators. The union of techniques must reduce the risk of loss. Also, I will present my trading rules used at entry or exit for four different situations. We will also see that Ichimoku can be used in other financial markets such as Forex or to analyze the commodity market or cryptocurrency. To conclude, we will explore the forgotten area of Ichimoku. This area can generate great profits when conditions are perfectly aligned. Come and participate in the revolution in technical analysis!CHAPTER 1 The Basics of Ichimoku Despite what many believe, Ichimoku is not a new indicator coming from nowhere, mirroring miraculous profits. The Ichimoku indicator was developed by Goichi Hosoda (1898-1982), a Japanese journalist, who wanted to create a great indicator that could help him make better investment decisions. The first idea goes back to the time of the Second World War. Hosoda tested his research for over 20 years before making it public in the late 1960s. He used many students to compile the results of thousands of tests because the computer was not yet available at the time. Only two variables are considered for the calculation of the components: the period and the price. While the volume is vital in the West, Hosoda completely dodges it. This system improves the quality of the inflows and outflows of the financial markets, highlights the trend reversals, and, most importantly, shows the areas of support and resistance that prevent the price from continuing on its trajectory. It is a very effective system that requires action only on specific criteria. Intuition has no place. The number of investment strategies based on this system remains limited. It is the number of alerts and signals generated by the system that complicates the use of Ichimoku. Learning Ichimoku inevitably involves a color chart because the tool has several components that must be distinguished from each other. The color of the curves presented in this book respects the general conventions. Drives that use monochrome devices have not been forgotten because an icon is associated with each indicator. Hosoda has developed three theories related to the development of the Ichimoku model: wave theory, price target, and time study. The wave theory of counting waves seems to me too subjective, just like Elliot's waves. The goal is not to expound on one thousand and one subjects at a time. The price target is akin to the target projection of chart figures that we will see in Chapter 2. The temporal study refers to the creation of a numerical sequence which is the source of the Ichimoku concept. These notions will be presented in Chapter 4. Hosoda’s mission was to show the trader the right moment to invest by using the Cloud as a trigger. Three Concepts for IchimokuAt first glance, Ichimoku is a rather vague concept. Some see it as a technical indicator, others as a type of chart, and the latter see a technical analysis system instead, * Technical indicator. It is a type of indicator just like the indicators MACD, RSI, or stochastic. An indicator can generate signals related to trend, momentum, volatility, and volume. © Chart type. It is a visual medium used to analyze financial securities such as Japanese candlestick charts, bar graphs, EquiVolume charts, or continuous line charts. It’s a chart type that use a lot of indicators. * All-in-one technical analysis system. It is a powerful technical analysis platform that combines several indicators to follow the triggering of alerts in order to buy or sell a security. It is an autonomous system that generates trading signals that consider areas of support and resistance but also the equilibrium zone. Ichimoku tells the trader the right time to buy, to sell, and also the time to avoid the market. It is a system whose effectiveness is based on a sequence of operations leading to a result. Success is subject to conditions that must be met; otherwise, the trader may suffer losses. Trading signals are generated because of crossing the price and indicators of Ichimoku or as a result of crosses between the indicators. Do not try to anticipate market reaction; use the signals generated by Ichimoku. Functionalities of Ichimoku The Ichimoku system consists of five indicators represented by curves like a conventional moving average. Each of these curves is used to define entry and exit points based on the history of financial stock. The indicators reflect simple mathematical formulas based on the price and the number of periods. Here are the six features of Ichimoku: © Illustration of equilibrium zones Illustration of future zones of support © Illustration of future zones of resistance Definition of reversal signals Definition of entry and exit points Definition of trend and momentum (strength of the trend) Each indicator that crosses the price of a stock generates signals of different intensities. Indicators should be seen as a whole, although the analysis of eachcomponent remains essential. We can speak of a system that generates signals to different degrees, the second signal coming to support the first with more vigor. Indicators below the price are considered as support areas. Indicators placed above the price are seen as areas of resistance. Of course, the trader who starts in trading can easily use the Ichimoku system. Some argue that one should put aside what is known about classical technical analysis before using Ichimoku. I totally disagree. I remain open to the simultaneous use of a host of tools to achieve my performance goals. The understanding of the notions of support and resistance, the recognition of patterns, and the understanding of divergences remains an undeniable asset. Japanese candlestick enthusiasts will be pleased to learn that Ichimoku has incorporated candlesticks as the main source of information. A candlestick is a graphical representation of a transaction period, which may be a minute, hour, day, or week. In addition, the trader can rely on the organization of complex patterns of Japanese candlesticks that predict certain market movements. Those with basic knowledge of technical analysis will not be disoriented, as cross- averaging and identification of support and resistance areas remain Ichimoku’s concepts. Ichimoku decreases the risk of getting a false breakout, but the trader must wait for strong signals before entering the market. The intuition has no place. Equilibrium or Trend When analyzing the chart, the trader tries to determine if the time is right for the investment. Bad valuations of the beginning and end of the trend cause the trader to make significant financial losses. Ichimoku allows, at a glance, to analyze the past, look at the present situation, and see the future trend. All thanks to the presence of three well-defined areas: © The bullish zone © The bearish zone © The equilibrium zone To get there, Hosoda started from the very simple principle that a financial stock has two states: equilibrium or trend. Equilibrium. Markets are in equilibrium when the share price moves within the lower and upper bounds of the area. Ichimoku’s indicator calculations are based on different time horizons to generate the equilibrium zone nicknamed the Cloud. To find the equilibrium point of a trading day, simply use the corresponding candlestick and make the difference between the top and thebottom of the day and divide the spread by two. The equilibrium point is the representation of the average of the variations of the share price. Hosoda considers the average price at the closing of the markets, not the closing price. Figure 1. Three zones—bearish, equilibrium, and bullish Figure 1 shows the centerpiece of the Ichimoku system presented in red and green: the Cloud. Other indicators of Ichimoku are ignored. The Cloud represents the equilibrium zone between buyers and sellers. The upper part of the chart represents the bullish zone, and the lower part represents the bearish zone. In an upside breakup, demand is stronger than supply; buyers take control of the market. When there is a break in equilibrium, the supply is stronger than the demand, which causes the share price to fall. Trend. Markets are in the trend when the share price leaves the equilibrium zone. When a rising stock crosses the top of the equilibrium zone, it means that traders are banking on a rising market. This area will serve as support in the future. When downward security crosses the bottom of an equilibrium zone, it means that traders are banking on falling markets. This area will serve as resistance in the future.ICHIMOKU - THREE GROUPS OF INDICATORS. Figure 2. An Ichimoku chart Figure 2 shows the components of Ichimoku for a stock during a prolonged downtrend. We can distinguish three groups of elements whose end is represented by a circle: © The first group on the left: a curve that looks like an oscillator. The end of this curve ends before the other indicators. * Second group: the price represented by Japanese candlesticks and the short- and medium-term indicators. This group ends at the same time, © The third group on the right: The Cloud is formed by an upper curve and a lower curve. This is the group with the farthest end. Parallelism and perpendicularity are striking in this graph. Just to make your mouth water: the cautious trader will invest when the price rises and crosses the red Cloud. Finally, Ichimoku can be seen as a trend and anticipation tracking system that invites the trader to move away from the equilibrium zone. This is the ideal system for those who want to do more than spend their days closely monitoring the financial markets. Signs of reversals are simple, clear, and future obstructions are predictable. Ichimoku offers traders to be on the right side of the market because the chances of winning are higher. The balance, although it is better to avoid it, may show an uptrend, a downtrend, or a neutral trend. Advantages of Ichimoku Learning Ichimoku can seem difficult because we leave the comfort zoneprovided by the Western technical indicators. These indicators have accustomed us to focus on the present moment and to monitor the breaks of the share price or the crossing of indicators. Ichimoku covers a much wider terrain. Ichimoku contains relevant information, depending on market dynamics. After a week, you will notice that the irritants of the departure will have completely disappeared. Here are the advantages of using the Ichimoku system: Anticipation. A few hours will be enough to anticipate the entry and exit points. Shifting the Cloud to the right allows the trader to anticipate future congestion zones (support and resistance). Flexibility of time frame. Regardless of the desired time horizon (15 minutes, 1 hour, 1 day, or 1 week), Ichimoku will display the same quality of information. Adjustment settings are not required when changing time frames. This means that the charts are always read in the same way. Functional on all financial markets. Ichimoku can adapt to any type of market, such as cryptocurrency, stocks, indexes, or Forex. Examples are presented in Chapter 10. Simple formulas. With Ichimoku, we are far from complex calculations to generate indicators like RSI, MACD, or stochastic. The formulas are so simple that you can apply the calculation directly to a stock chart. The system is simple. Unlike moving averages or other indicators, the trader does not have to change the Ichimoku settings to adjust to market conditions. Standard settings are 9-26-52 but remain adjustable. The system is autonomous. Ichimoku is effective and does not need to be supported by other indicators. However, it is wise to validate your inputs and outputs with other tools if in doubt. The system uses Japanese candlesticks. Candlesticks alone are a good source of information. Candlestick patterns show bullish or bearish formations that predict short-term direction, regardless of the market. The system shows the future zone of resistance. It’s easy to identify areas of congestion that will slow down prices. The zone of resistance invites the trader to leave the market or to anticipate a rebound toward the bottom. The system shows future zone of support. The trader can predict where the reversals will occur during a downtrend. Short sale enthusiasts will close transactions when the price reaches the support zone. The system shows the busy areas for the past-present-future. This is theonly indicator that tracks the support and resistance zones so tightly. These areas help predict price orientation. The wait before the risk. An Ichimoku chart that shows a lot of distortions, making it unreadable, sends the message to the trader to stay on the sidelines and wait for an opportune moment. The gain goes through the trend. Balance creates low profits because supply and demand are at the same level. The trend is that supply or demand has taken control of the market and is causing significant price fluctuations. Alerts are generated at different power levels. The system generates short- term signals that will be backed by higher quality signals to reassure the trader of the accuracy of the investment. Support and resistance. The indicators and the Cloud represent areas of support and resistance built by the displacement of the price. It is no longer necessary to draw lines to identify areas of support and resistance. Simple strategies. The strategies are based on the sequence of simple signals that leads the trader to take action. It only takes one, two, or three conditions for a strategy to be viable. Three horizons of time. Ichimoku includes three indicators or groups of indicators to work on past, present, and future information. No other indicator offers this possibility. Only one window for Ichimoku. Each traditional technical indicator like the MACD or the RSI plays a different role in the stock market analysis. Some indicators focus on trend tracking, while others are used to assess market momentum. Most of the indicators generate graphics with a multitude of windows that occupy the entire surface of the screen and even more. This multitude of windows makes the task difficult for traders who made transactions with a smartphone. Ichimoku Preview Let’s use Facebook's graph to become familiar with each of the components that will be seen in detail in the following chapters. The share price represented by the Japanese candlesticks shows a strong downward trend since the end of July. Facebook was one of the triggers of the crash of autumn 2018, which started in early October for the majority of global indexes.ete ones: + GanesionUine + tase ine Leading Spa Line - Leading Spas Bine + Lagging Sen Line Figure 3. Curves and data of an Ichimoku chart Notice the price that sinks under the Cloud at the beginning of August. Some strategies indicate that as long as the price remains below the Cloud, Facebook will be in bearish mode. The chart serves only as an introduction to help the trader recognize Ichimoku components. At the top left, we see the settings used for Ichimoku: 9-26-52, Next to it, we have the value of each indicator as of the last period. Indicator data is presented in the following order: © Conversion Line * Base Line © Leading Span A © Leading Span B © Lagging Span Due to the mastery and constant use of the Ichimoku system, many users of classical technical analysis are renouncing their traditional indicators. Do not be surprised to see a significant increase in your performance when you strictly respect the signals generated by Ichimoku. Before using this system, it is necessary to see the basic concepts of technical analysis essential for all types of traders, short term or long term. These concepts will be useful throughout the book. Ichimoku Chart Providers Most financial institutions and brokers already offer Ichimoku charts on tradingplatforms. Some present it as an indicator, while others offer it as a type of chart. If the tool is not available, make a complaint to your institution. The more complaints there are, the greater the chances of getting it quickly. In fact, it is abnormal that a modern institution does not offer access to the Ichimoku that entered the West in the early 2000s. Here is a list of Ichimoku graphical providers available on the web: www. finance.yahoo.com www dailyfx.com www.ichimokutrader.com www.marketinout.com www.stockcharts.com www.tradingview.comCHAPTER 2 The Basics of Technical Analysis This chapter is for beginners who have no knowledge of technical analysis. An overview of the various proper concepts, technical vocabulary, and trading tools is required before diving headlong into a new method. The purpose of this book is not to give up everything that has been written in Western technical analysis for 50 years. Evolution of Stock Charts The graphical representation of the stock market indexes has evolved since the creation of the Dow Jones index at the end of the 18th century. The index was calculated manually and represented the average of 11 industrial stocks. The average closing price was represented by one point. The union of points represented the index. Figure 4. Linear chart Linear chart is the simplest and least used financial chart for traders. In fact, it only serves to present the evolution of the price over a very long period. Market analysts at the time came to the conclusion that it was necessary to acquire additional information for each trading day. Subsequently, the OHLC bar chart comes into the picture and brings with it the emergence of investment strategies. An open-high-low-close graph illustrates the price change for each period. A period can be associated with different time frames: minute, hour, day, week, month, or year. Let’s use the Dow Jones data again to display an OHLC bar chart. The price curve gives the impression to walk sawtooth.image not availableimage not availableimage not availableThe Market Trend The price of a stock, index, or value can move in three ways: up, down, or sideways. Upward movements are slowed or blocked by a resistance zone, and the downward movements are slowed or hampered by a support zone. Lateral movements occur in a period of consolidation while supply and demand are in perfect harmony. A bullish trend line, from bottom to top, must be drawn under the price. The line serves as support. An uptrend reflects a high demand that pushes each buyer to pay a little more for the coveted stock. A bearish trend line, from top to bottom, must be drawn over the price curve. The line serves as resistance. A downward trend reflects a high bid that pushes the seller to lower his price to liquidate his shares. The absence of new buyers leads to weakness. A lateral tendency occurs without overbidding between buyers and sellers. The straight line is definitely the best tool to highlight a trend. Also, no parameter or calculation is necessary. You just have to look and draw lines in order to identify areas where there might be a break - up or down. This is the simplest technique for determining future trend reversal points and obviously one of the most underrated. A trend line is considered significant when it links at least three points. Each touch increases the validity of the trend. Only one line is needed to know the exit point. We are not limited to drawing trend lines on the price. You can also draw a trend line on a wide range of indicators such as ADX, RSI, SMA or Stochastic. Don’t forget to add trend line to volume. Let's take a closer look at the behavior of the two straight lines during trend breaks. The weekly chart of the video game company Electronic Arts shows a long uptrend and a downtrend of shorter duration.Figure 53. Protection Stop over the Cloud The price variations inside the Cloud are rather low. When the price is about to break the top of the Cloud, there is an explosion. The break from the top of the Cloud was quick, and the rest seems promising. But why? The Cloud represents the strongest zone of resistance. The trader who enters the market after the breakout of the Cloud should place the Stop under the top of the Cloud to protect himself from a sudden drop. The horizontal ceiling of the Cloud indicates that the support is concentrated at the same level. The stock continued its run up to $86, Important Reminders Difficulty reading a chart. Charts with low volume transactions are difficult to read because there is no trend. Three horizons of time. Ichimoku can display information about the past, present, and future. Cloud Twist. A green-red twist indicates a downward trend when the price is below the Cloud. A red-green twist indicates an upward trend when the price is above the Cloud. Cloud at the flat top. The zone of resistance is frank. The breakout of this zone can lead to a rapid rise in prices. Cloud in the flat bottom. The support area is straightforward. The breakout of this zone can lead to a rapid decline in prices. Target. The Ichimoku system extrapolates the position of the equilibrium zone and thus the support and resistance zones. Stop protection. The components of the Ichimoku make it possible to establish the position of a protective stop. It is necessary to bet on the indicator which represents the best support or resistance.CHAPTER 5 Ichimoku Strategies The goal of any effective trading strategy is to provide traders with strong signals to enter the market early and exit on any sign of weakness, Simple strategies remain the most popular, so popular that markets seem to react at the same time. Think of the crossing of the SMA50 moving average that passes above the SMA200 moving average and generates a buy signal. This strategy is followed by thousands of traders who react at the same time. Recognized strategies are in the sights of market makers who are already anticipating the reaction of traders. Ichimoku-based strategy development requires the analysis of each component before diving into the market. The strength of Ichimoku rests on the entire system. The analysis of the alerts previously seen will facilitate the understanding of the strategies to use when entering and leaving the markets. The positioning of the other indicators will make the difference between a good and a bad strategy. Whatever the strategy used, the Ichimoku will highlight strong elements such as: The trend The momentum Entry points Exit points The bullish zone, the bearish zone, and the equilibrium zone Current and past support and resistance zones Despite a general misunderstanding of investors, Ichimoku attracts a good clientele. The signals launched by Ichimoku succeed in causing volatility in the financial markets. We will cover five important strategies based on Ichimoku. Each of the strategies focuses on an indicator that serves as a starting point, after which one grafts conditions to be met. The proposed strategies have three or fewer conditions. The choice of the strategy depends on the configuration of the chart. It is sufficient to determine if one of the following situations exists: © Crossing between an indicator and the price * Cloud breakout by the price© Crossing between indicators Alert combinations are numerous but revolve around the same elements. After some analyses, you will quickly recognize the configurations that have a chance of success. It is the positioning of the other indicators that confirms the validity and the power of a configuration. The five strategies based on Ichimoku are: © Conversion Line/Base Line Cross Strategy (Tenkan-Sen/Kijun-Sen Cross) © Base Line Cross Strategy (Kijun-Sen Cross) * Cloud Breakout Strategy (Kumo Breakout) © Lagging Span/Price Cross Strategy © Lagging Span/Cloud Cross Strategy (Chikou Span Cross) After revisions of the strategies, the trader will be able to forge a strategy of his own. A strategy must be easy to memorize for the trader. We often see on the web strategies that include more than a dozen rules to respect. Given the impossibility of memorizing too many steps, abstain! Conversion Line/Base Line Cross Strategy The Conversion Line and the Base Line are the nerve center of Ichimoku, as these curves are directly related to the stock price. Just like classic moving averages, crossovers of the Conversion Line and the Base Line must be monitored, as well as the moment when the price crosses these curves, up or down. This strategy is for the trader who wants to trade in the short and medium term. Here are the basic requirements of the Conversion Line/Base Line cross strategy during a purchase: 1. Mandatory condition. Crossing must be over the Cloud. 2. Mandatory condition. The current price is above the Cloud. 3. Mandatory condition. The Lagging Span is located above the price of the 26th previous period. The crossover position between the Conversion Line and the Base Line will affect the signal strength. If the crossing is above the Cloud, it is a strong bullish signal. If the crossing is under the Cloud, it is a weak bullish signal that still deserves our attention. Summary Table of the Conversion Line/Base Line Cross Strategy