Linkon, I know you say that the cloud is the most overrated part of Ichimoku.
However, shift the cloud back x periods to match CS and they are equivalents in ideology.
The only difference is that the two lines for the cloud are averages and CS is based on the close.
This will not change your trading strategy. It also gives the trader his focus on price action while
being able to reference what ichimoku is saying without cluttering up the chart. Just my 2 cents.
Also, I know some Ichimoku traders say not to make trades in the cloud. The me, this makes no sense.
That's like saying don't trade long when price is bouncing off a 50ma when the 200ma is overhead.
I know what your saying but you should consider that if most(from what I know)traders say not to trade in the cloud there is probably a good reason for it. In other words your more likely to get chopped up. With that being said there are circumstances where I would initiate a trade in the cloud if was an entry was generated outside of the cloud if you know what I mean. Like everything else you don't have to play strictly by the rules but if you do it enhances your probabilites of success.
I agree. I traded ichimoku for 1 year exclusively with a great return. It was pretty easy when the market was bull the whole time though.
However, my question and point was that how can the cloud be overrated when the only difference between the cloud and chikou is that the cloud uses averages and chikou uses the close? CS is x periods back. The cloud is x periods forward. Shift the cloud back with CS and what you have is the close moving with two averages.
It makes no sense to not trade through the cloud or reversals off the cloud when it's simply a moving average aka a point of S/R. Also, gaps are usually shown with by a large cloud, and when gaps get tested and filled, you better believe price is running through that baby.
I suppose it all depends on your strategy and the expectancy you've returned with said strategy. I haven't used Ichimoku in over a year but it's still one of my favorites to check out.
To be honest I haven't really thought about it to much. I am new to this whole deal anyway so I remain open to all potential methods of trading with it (paper trading anyway) so I can't really argue with what your saying.
I do know that the "standard" settings are for the chikou is 26 based on close but the senkou's are based on highs and lows not the closes ...26 and 52 fwiw