Ichimoku kinko/cloud

ichimoku kinko is a versatile indicator that defines support and resistance,identifies trend direction,gauges momentum and provides trading signal.

The ichimoku cloud was created on  the basis of 3 periods,that is;9period,26period and 52periods.These periods can either be in terms of seconds,minutes,hours,days and months.It will be based on the time frame that one will choose to use.In most trading platform,these periods are on default thus one has the right to adjust them when they want to use them.

The ichimoku cloud has got two pairs of colour,that is; red/black and green/white.The red/black indicates the bearing market while the green/white indicates the bullish market.The red/black cloud normally moves above the graph while the green/white clouds normally moves below the graph.When the red/black clouds are moving above the graph,that is an indication that the market will be moving downwards thus one should enter a sell position while if the white/green clouds are moving below the graph,then that will be an indication that the market will be moving upwards thus one should enter a buy position.

The ichimoku kinko constitute of 3 sectors.that is;Kumo(cloud),Tenkan sen(line),kijun sen(line),chikou(span),senkouspan(A) and senkou span(B). The kumo(cloud) is located inside the senkou span(A) and senkou span(B).The kumo(cloud) is the one that moves above or below the graph thus enabling one to know when to enter a buy or a sell position.The chikou span acts as a trade filter such that when there is a bearish market then it will show downward trend while when there is bullish market,it will show upward trend.During the bullish market,the kumo(cloud) will be below the graph thus the senkou span(A) will be above the kumo(cloud) while the senkou span(B) will be below the kumo(cloud).During the bearish market,the kumo(cloud) will be above the graph thus the senkou span(A) will be below the kumo(cloud) while the senkou span(B) will be above the kumo cloud.This is indacated as below;


From the figure above,all the sectors of the ichimoku cloud are being indicated by the arrow.The kumo(cloud) is the shaded cloud located inside the senkou span A and senkou span B .Kijun sen is the blue line while tenken sen is the red line.The chikou span is the green line
The kumo(cloud) are moving below the candle stick thus an indicator of a buy position.This gives the trader the signal of entering a buy position.For the downward trend signal,here is how the kumo(cloud) looks like;

From the figure above,all the sectors of ichimoku cloud are being indicated by the arrow.The kumo(cloud) is the shaded cloud located inside the senkou span A and senkou span B.Kijun sen is the blue line while tenken sen is the red line.The chikou span is the green line.
The kumo(cloud) are moving above the candle stick thus an indicator of a sell position.This gives the trader the signal of entering a sell position

Recommendation:If you are a day trader,use 1minute time frame,5minute time frame,15min time frame and 30 minute time frame if you want the ichimoku cloud to work for you while if you are a swing trader just use 1hour time frame and so on if you want the ichimoku cloud tool to work for you

Recommendation 2:Use common sense while trading with ichimoku kinko tool

Comments

Post a Comment

Popular posts from this blog

MA cross

Image
MA cross is a trading indicator that is used to filter out noise from the price chart. MA cross can also be used by a trader to know the direction in which the price is moving. MA cross indicator is a trend indicator. MA cross is based on the crossover. Based on the crossover, MA cross has two moving average, the shorter term moving average and the longer term moving average. The shorter-term moving average is normally red in color and it represents the price while the longer term moving average is normally blue in color and it represents the moving average. Therefore, since MA cross is based on the crossover, it, therefore, follows that when the short term moving average crosses above the long-term moving average that will be an indication of an upward market movement thus the trader should be trading upwards. On the other hand, when the short term moving average crosses below the long-term moving average that will be an indication of a downward market thus the trader should b
Read more

coppock curve

Image
Coppock curve indicator was created by Edwin Sedge Coppock. The coppock curve is a momentum indicator that was mainly created to determine the buy entry in the stock market.Beside buy entry for stock sell signal can also be identify though not recommended. Coppock curve has 3 period,that is 10 period,14 period and 11 period. Coppock curve is an momentum oscillator and therefore has an oscillation at point 0.0000. Coppock curve is therefore calculated using the following formula which is based on the 3 periods; Coppock curve =( WMA of 10period) of (14 period ROC+11period ROC) Where as; WMA is Weight Moving Average; ROC is Rate Of Change indicator; Since coppock curve has an oscillation at point 0,it therefore follows that when the coppock curve falls below 0.000 that will be an indication that the market has become an oversold market thus the trader should close any sell position and enter a buy position.On the other hand though not recommendable ,when the coppock curv
Read more

Least Square Moving Average(LSMA)

Image
Least square moving average is also called linear regression moving average. Least square moving average is a trend following indicator. Just like in other moving average indicators, least square moving average is also used to indicate the direction of the market, that is whether the market is trending upwards or downwards. Least square moving average is based on bullish and bearish market as well as support and resistance. Least square moving average is therefore calculated using the following formula; LSMA= h*t+b  where as h={(n Σt i x i ) -  ( Σt i Σx i )}/{(n Σt i ) - ( Σt i Σt i )} b=1/n Σx i -h*1/n Σt i while t is the time and n is the period Since least square moving average is a trend following indicator and is based on bullish and bearish, it therefore follows that when the market is in an uptrend movement,the least square moving average will also be moving upwards while when the market is in a downward trend, the least square moving average will also be
Read more