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Ichimoku Reconstructed...!
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Ichimoku Reconstructed...!

  #21 (permalink)
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4. We cannot attempt a long or short trade without a valid stoploss or reference point. i.e. We need a confirmed higher low for a long trade and a lower high for a short trade.

If price has broken the lowest point of the range, then there is no provision for a counter trend long trade as, as a rule, we need a valid reference level to attempt a trade. when the lowest point of the range got broken, we cannot draw a trend line.

If a lowest point is intact and the reference level is broken, then we have to interpret it as a weakness on the buyers of the market and price had to auction lower to search for fresh buyers.

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Its only when price is able to climb back above the old trend line
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that we can re-draw a new trend line and place a new reference level on the chart for longs.
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  #22 (permalink)
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5. The process of triangulation on CS continues. The angle of the trend line tells us the degree of aggressiveness of the market participants in a give direction.

6. Next task is to isolate the support / resistance on the CS. A support / resistance horizontal line that has acted as turning point on 3 or more occasions is terms as a 3 touch. It deserves to stay on the chart for future reference as we can assume market to react to this lvl in the near future.


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  #23 (permalink)
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7. Now we look at KS and TS and their interpretation.

This 2 lines are seen as a pair. If i am trading a 3 min time frame, then my TS setting will be 5 and will represent the development of the 15 min time frame. KS will get a setting of 20, as that will represent the development on hourly time frame. Kumo will get a setting of 40 as that will be 2 hr time frame.

8. when KS is flat, it means no new high / low is made in the last 20 bars. Expectation is of a sideways market with no major action from either side.

9. When TS crosses KS from below, it means a crossover of time frames and a rise in bullish sentiments.

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Hello Linkon

Good to see you here. I thought I was the only one who flew all over the net!




linkon7 View Post
Ichi cloud is the most over hyped indicator there is...


Would you be kind enough to explain, on what basis you stated the above?


linkon7 View Post
Ichimuku is a lazy way of trading, where the objective is to capture 80% of the trend. It is a pure trend following system and that normally implies that entry will be delayed and that too only after confirmation of the trend. Trade is always in the direction of the trend and there is no provision for counter trend trades.

There is no hurry to exit and idea is to hold a trade till the trend exhausts itself.

What minimum TF do you recommend to get the max out of Ichimoku? I guess, 1 min or 5 min are of no use.

Thanks

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  #25 (permalink)
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EagleOne View Post
Hello Linkon

Good to see you here. I thought I was the only one who flew all over the net!





Would you be kind enough to explain, on what basis you stated the above?



What minimum TF do you recommend to get the max out of Ichimoku? I guess, 1 min or 5 min are of no use.

Thanks

Nice to see you here..! futures.io (formerly BMT) was highly recommended by a very close friend who thinks i'll find plenty of helping hands and like minded souls here. So far i'm enjoying myself devouring so many new thought process posted by some great thinkers here.

The issue with cloud is that it is just another higher time frame element on the chart. If i am watching eod chart with settings of 5,20,40... then i am watching the development of weekly time frame by tracking the movement of TS, the monthly TF is the KS while bi-monthly is the cloud. The midpoint of the TS+KS (or action point) of a month ago forms the other end of the cloud.

Cloud also provides us info about the volatility and the aggressiveness of the market participants. But most of the time, the cloud is assumed to be a dynamic support resistance zone. Reality is, it is just the midpoint of a yet higher time frame bar.

Sometimes when we get a good rally, it appears that the cloud was able to capture a very big move. In reality, CS does a far better job. Support and resistance is best visible on the line chart as it is clean and easy to be decisive. The trend line on CS give us the direction of the trade. It also gives us our must exit point.

regarding TF, the nice part is, it works on any tf. If i plan to trade 1 min tf and keep an eye on 15 min tf (TS = 15) and hourly (KS = 60) and 2 hrly (kumo = 120). Only thing i have to keep in mind is that lower time frame means more details. but essence remains the same.

However, i cannot eliminate time and use range bars, or renko or better renko... as time is a key element of ichi...!

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linkon7 View Post
In reality, CS does a far better job. Support and resistance is best visible on the line chart as it is clean and easy to be decisive. The trend line on CS give us the direction of the trade. It also gives us our must exit point.

CHART A
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CHART B
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In chart A, CS shows the 4939 to be a 3 touch reference level. When it broke down, we could draw a trend line from the top with a valid stop loss on 4958, short was a valid trade with a valid stop loss. Trailing it with trend line and new reference level would mean, i would still remain short on this trade with no reason to exit yet visible.

The chart B, with cloud as reference level, would make me short below 4869 (low of the first bar piercing the cloud) with a stop above the 4938 mark (value top of the cloud when cloud got pierced)

In both the cases, TS crossed KS and was pointing towards weakness. But if one gave importance to cloud, a crossover above the cloud would be seen as a weak signal. CS shows that a valid 3 touch reference level got broken and that lvl itself will offer resistance now.

Nothing is holier than price and how market participants reacted to a particular level (AKA support-resistance) and CS does the best job in helping me be more decisive.

PS : its a 15 min chart of nifty futures, with TS = 4 (hourly), KS = 25 ( daily) and kumo = 50 (2 days tf)

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  #27 (permalink)
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If one uses the cloud for their decision making then the distance they cover is a small chunk of what CS would offer in the same trade.

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Hey Linkon...welcome to futures.io (formerly BMT)....I m kkeskar from TJ.
Check out the elite section of the forum...loads of info and innovative systems.

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  #29 (permalink)
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decission support tools...!

I use a slightly smooth RSI to track the momentum of the market. Mostly i look for continuation patterns on the RSI as reinforcement to my decision to hold and build on my trade.

I shift the RSI 20 bars to the left to align it with the CS. A pivot on CS needs to be valid and only then we compare it equivalent RSI value.

Divergence / reverse divergence is a strong signal for exit.

Divergence is a support tool for entry, if and only if, i have a valid stoploss from CS and TS-KS combo is showing weakness.

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decission support tools...!


I use stochastic with standard setting to time the entry.

Only purpose of this oscillator is to identify the short term cycle.

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