I have received many questions about how to trade with Ichimoku chart.

I will provide the very basic method of the trade using Ichimoku chart here.

There are 3 main signals to watch.

 

1) Kijun Line & Tenkan Line

Tenkan Line (red) & Kijun Line (blue) are just like Moving Averages on normal charts.   These lines can be resistance & support.  Also we care 2 line cross up/down.

We sell when these lines cross down.  We buy when these lines cross up.   Yes, just like EMA crosses.

 

2) Chiko Line (Purple)

This is the line which represent the current price, but place the line 21 candles back.  This means, we want to compare the current price vs 21 candles ago.

If Current price > 21 candles ago, then we say bullish.
If Current price < 21 candles ago, then we say Bearish.

 

3) Current price & Clouds

If Current price > Clouds, we say Bullish.
If Current price < Clouds, we say Bearish.

 

When all of the above items become Bullish, we say “3 yaku Koten” – 3 biggest Buy Sign.

In the same say, we say “3 yaku Anten” – 3 biggest Sell sign for Bearish.

 

 

 

Now let’s take a look at the real example.  This is NZDJPY daily chart.

SELL1 is the most aggressive sell entry, simply because Tenkan Line crossed down Kijun Line.

At SELL2, Chiko line went below the 21 candles ago.  So more bearish.  Some people sell at this point.

At SELL3, the price went below the clouds. So more bearish.  Some people sell at this point.

 

As you know, the basic is Tenkan Line/Kijun Line crossing.  And Chiko line and Clouds can add more confidence.

2015-10-20_18-06-53-Ichimoku2

 

Most traders in Japan use Daily and Weekly Ichimoku.   But there are traders who also use Ichimoku for Hourly, or even 1 minute chart.

 

This is the basic of Ichimoku chart.  I hope you find it interesting to use Ichimoku.   I don’t use this chart aggressively anymore.  But I still observe the location of the clouds and Kijun / Tenkan lines of Daily & Weekly charts.

 

 

I promise I will provide you the advanced version of “How to trade with Ichimoku”, sometime in the future.

The real Ichimoku theory contains a) Wave theory (just like Elliott Wave), b) Time Management (expect when the trend will start/end)

 

So stay tuned…

 

 

YJ Baik – Forex.Today @ Tokyo

 

 

 

 

3 thoughts on “How to trade with Ichimoku Chart”

  1. Dimitar Ivanov says:

    Thanks YJ! I’ve been awaiting this post!

  2. Jo says:

    very detailed insights on how to trade the ichimoku, can’t wait for the advance version of your post. Appreciate your time and effort

    Cheers
    Jo

    1. YJ Baik - Forex.Today says:

      You are welcome, Jo.

      I can post the adv. version in a few weeks.

      Stay tuned.

      -YJ

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