Cloud charts

Cloud chartsCloud Charts

£29.99

Format: Hardback 200 pages with full colour charts

Availability: Out now

BOOK DESCRIPTION

Cloud Charts teaches you all about the Ichimoku technique originally from Japan and now used by traders all over the world. The book is the first major work in English on the technique and covers everything you need to know to trade with Ichimoku effectively. Cloud Charts comes with full introductory summary to the most useful technical analysis techniques and how to apply them with Cloud Charts. The book covers many groundbreaking ideas including multiple timeframe analysis, combining clouds and other techniques, backtesting and trading strategies.

To view an abridged copy of Cloud Charts click HERE

david linton - Biography

David Linton MFTA

Chief Executive, Updata plc

He is a member of the UK Society of Technical Analysis (STA) where he teaches the Ichimoku technique as part of the STA Diploma Course and is a holder of the MSTA designation. He is a member of the Association of American Professional Technical Analysts (AAPTA) and was awarded the Master Financial Technical Analyst (MFTA) qualification by the International Federation of Technical Analysts (IFTA) for his paper on the Optimisation of Trailing Stop-losses in 2008.

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Inforum2015europe infor with ambition to increase cloud computing license revenue

Inforum2015europe infor with ambition to increase cloud computing license revenueInforum 2015 Europe: Infor with ambition to increase cloud computing license revenue

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Zb cloud lines kijun

Zb cloud lines kijunX-pro Forex Trading Strategy

Any Major Currency Pair

ZB Cloud Lines (Tenkan: 8, Kijun: 29, Senkou: 34)

XprofuterDD (Per: 14, Drawshift: 14, MA Period: 34)

Long Position:

The rules for long entry are as follows.

1) Xprofuter indicator has to be above the “0” line.

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X-pro Forex Trading Strategy Buy Signal

In the picture above you can see that XProfuter (the indicator in a separate box below the chart) indicator is moving above “0” line, therefore its value is greater than 0. And then, the price closes above the ZB cloud line. That is the long (buy) signal.

It depends on the currency pair. If you are trading EUR/USD, you can take profit partially at 40pips, 80pips and 120pips. Once you reach first profit target, move your stop loss to entry point.

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CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

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Ichimoku cloud trading in the forex market

Ichimoku cloud trading in the forex marketIchimoku Cloud Trading In the Forex Market

The Ichimoku Cloud, also referred to as a one glance equilibrium chart . increases the probability of trading drastically. How so?

It isolates higher probability trades in the Forex market by excluding more false signals requiring greater confirmation prior to generating a signal.

The Ichimoku Cloud does this by integrating three signals into one chart, enabling traders to make the most informed decisions. The application has been used effectively in the Eastern world especially in Japan for decades before progressing to the Western world. Integrating the Ichimoku cloud and Japanese Candles provided a powerful combination for generating trading signals.

Before trading successfully on the Ichimoku chart, a primary understanding of its components is necessary. Originally, it was constructed by a Tokyo journalist Goichi Hosoda, with a number of mathematicians running multiple calculations. After three decades of research, Hosada completed the Ichimoku Cloud and brought it out to the Japanese market where it began.

Initially when one looks at an Ichimoku chart, the abundance of the lines drawn may seem confusing. However, the components can be easily identified and translated with just a few simple steps.

The Components of Ichimoku Cloud System

The Ichimoku cloud trading system is essentially made up of five components offering the main insight into Forex trading price action to traders. The five components that we will look into are:

The Tenkan Sen/conversion line

The Kijun Sen/base line

Senkou Span A/leading span 1

Senkou Span B/leading span 2

Chikou span/lagging span

The tenkan/conversion line is determined averaging the highest high and lowest low during the previous nine periods, contrary to using the closing prices in most moving averaging systems.

Similarly, the kijun/base line is calculated by averaging the highest high and the lowest low. Despite the calculation being similar, the kijun sen takes the prior 26 periods into account.

The third line which is the Senkou span A also referred to as the leading span 1 forms one of the boundaries of the Ichimoku cloud or what is called the Kumo. The senkou span A/leading span 1 line is determined by calculating the average of the tankan and kijun. It is then projected 26 days into the future.

The fourth line which is the Senkou span B/leading span 2 forms the other boundary of the cloud. The Senkou span B/leading span 2 is determined by calculating the average of the highest high and the lowest low over a period of the previous 52 days. It is then plotted 26 days into the future.

The space between the two leading spans (senkou span A and B), represents the cloud also referred to as Kumo in Japanese. These two spans are projected into the futue to capture the principle of a trend. The projections provide Forex traders with a preview of where the trend support or resistance falls.

The Chikou span/lagging span which is the fifth line, is the current daily closing price projected into the past by 26 days. This lagging span measures the strength of the signals created by the other components.

Figure 1: Ichimoku Cloud Components

Generally, the Ichimoku cloud charts give traders a simple but powerful method to gauge the directional trend of a market. It also provides a powerful tool for identifying key support and resistance levels. Forex traders can anticipate the likely future price trends depending on the location of the cloud. The Ichimoku Cloud is still developing among western traders due to the lack of quality material out there on it. But its high level of accuracy, along with ability to spot future support and resistance levels, along with trending and reversal signals are making this a popular tool for traders looking to gain an edge.

The tenkan

The tenkanThe Tenkan / Kijun crossover trading strategy

The Ichimoku Cloud has many strategies build into it, but one of the more popular ones is the Tenkan Kijun Cross strategy. Before we get into the strategy itself, we need to explore the components of it.

The Tenkan line (also referred to as the conversion line or turning line) is a commonly used component of the Ichimoku cloud strategy. This strategy is signaled when the tenkan line crosses over the kijun line. The Kijun line is referred to as the trend line as Kijun-sen means ‘trend line’.

The strength of the Tenkan/kijun cross can be determined on the basis of its position in relation to the cloud or kumo. This strategy and setup is strongest when the bullish cross occurs above the cloud (kumo). The signal is neutral when it occurs within the cloud. It is weak when the signal occurs below the cloud.

Similarly, when the Tenkan line crosses above the kijun line, it becomes a bullish indicator.

Furthermore, when the Tenkan line crosses below the kijun sen, it becomes a bearish signal.

Generally, as we have seen above, the Tenkan/kijun sen cross strategy is categorized into three main parts: strong, neutral and weak. Traders can make trading entries and /or exits depending on the strength of the crossover.

Actually, a long entry requires a bullish Tenkan/kijun crossover to happen above the kumo while short entry requires bearish crossovers to happen below the kumo. Moreover, open positions are exited if a reversal system happens or the close no longer happens below or above the kumo.

Figure 1: Chart illustrating one of the basic classification of the Tenkan/Kijun sen cross

Basically, we have a buy when the Tenkan line crosses above the kijun line and a sell when the tenkan crosses below, however the signal can get a lot more subtle than just that.

Prices above the kumo indicate an uptrend situation while prices below the cloud signify a downtrend situation. The Tenkan/kijun crossovers either above or below the cloud have to be attained since it has short duration and related to kumo support and resistance. The Ichimoku clouds can be used to create a simple Tenkan/Kijun trend-following crossover model.

When the Tenkan/Kijun sen cross has been solidified by a close, then a trader can make an entry order in the direction of the cross. However, the operative Ichimoku practices require the traders to consider any support and/or resistance levels and getting a closing above those levels before attempting an entry order.

An exit order for the Tenkan/Kijun sen cross depends on a variety of signals exhibited by the Ichimoku cloud chart. The Tenkan/Kijun sen cross in the opposite direction of the trade is the most common exit signal. Nevertheless, other factors such as time frame and management risks may dictate an earlier exit or exits due to other signals in the Ichimoku cloud system.

The Tenkan/Kijun line cross strategy allows the trader to execute appropriate time frame and their personal management rules; and then consider the effective structure for setting their stop-loss. This strategy does not dictate any Ichimoku signal for stop-loss placement. It also approaches profit targeting from a day trader perspective and a position trader perspective. From a day trader’s point of view, the take profit targets are set using key levels while a position trader does not set specific targets but prefers waiting for the present trend to be overturned by a Tenkan/Kijun line cross moving in the opposite direction of the trade.

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Ichimoku Cloud Trading In the Forex Market

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Kumo trading strategyAt this page you can download MT4 Forex indicator

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100% Free - Ichimoku Cloud Breakout Forex Strategy

This forex trading system is called Ichimoku Cloud Breakout Forex Strategy (or kumo breakout ).

After downloading and copying the necessary files, apply to any major currency pair such as EUR/USD, GBP/USD, USD/CAD or USD/CHF and set time frame to M5 (5 minutes).

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Ichimoku Cloud strategy is profitable and trading signals are very easy to follow. The entry for the kumo breakout trading strategy is simple;

when price closes above/below the kumo, the trader opens a trade in the direction of the breakout.

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Ichimoku Cloud Breakout Forex Strategy Trading Rules:

We are going to open long position (buy) when the candle turns to green .

We are going to open short position (sell) when the candle turns to red .

I will mark the signals for you to make it clear:

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Ichimoku | Reading Ichimoku Charts | Ichimoku Trading Strategies

What does Ichimoku mean?

Ichimoku is a Japanese phrase that means one glance. Its creator Goichi Hosoda named Ichimoku that way because he wanted it to be one indicator that takes place of everything without the need of other factors or indicators.

What does Ichimoku consist of?

1: Tenkan-Sen: A 9-period Moving Average. This is the first line you have to adjust when you apply Ichimoku to a chart.

2: Kijun-Sen: This is a 26-period Moving Average. It is usually the second line you have to adjust when you apply the Ichimoku to a chart.

3: Chinkou-Span: Current price plotted 26 periods earlier.

4: Cloud: Better known as Kumo, which simply a Japanese word for cloud, and that is exactly what it is. Kumo tells us the volatility of the market, the wider the Kumo is, the more volatility is in the market. Note that in this article, you will encounter both words Kumo and Cloud, you dont have to worry at all, both are the same and there is no difference at all between them. Just use the one that comes to your mind first.

How can I determine my bullish or bearish position using Ichimoku?

This is very easy.

When the Tenkan-Sen crosses up and walks above Kinjun-Sen, this means we have a bullish signal (buying signal). Look at this snapshot:

When the Tenkan-Sen crosses down Kijun-Sen, this means that we are having a a bearish signal (selling signal). Take a look at this:

Trading with Ichimoku Clouds

Kumo means cloud in Japanese language, and the Kumo of Ichimoku is simply a shaded area between two lines, one of them represents the range of resistance during a downtrend and support during uptrend (this is really not important to understand or to memorize).

When the trend is moving above the cloud that usually means it is an uptrend and then the Kumo would work as a support for the market. We should look for buying opportunities.

When the trend is moving under the cloud that usually means it is a downtrend and then the cloud would work as a resistance for the market. We should look for selling opportunities.

Can Kumo (Ichimokus Cloud) indicate what will happen in the future?

Nobody can tell exactly what will happen in the future, however, still Ichimokus Kumo produces 26 periods ahead of time. BUT, this doesnt necessarily mean that price action will follow Kumos direction.

How can I trade with Kumo?

Remember that Kumo, at the end of the day, is just an interpretation of the trend direction. So (as we already learned, that market above Kumo is an uptrend market, and vise versa) if the market is moving above Kumo we should be looking for buying opportunities.

So, if we are looking for an Ichimoku buy signal, there are three circumstances we could face:

1: Tenkan-Sen crosses up Kijun-Sen (remember? this is a buying signal) above the Kumo. This means a VERY strong buying signal, because it simply agrees with the direction of the trend, which is going up (we knew it is going up because it is above the Kumo of course).

2: Tenkan-Sen crosses up Kijun-Sen inside the Kumo, which means an average-strength buying signal.

3: Tenkan-Sen crosses up Kijun-Sen below the Kumo, which is a weak buying signal, because it doesnt agree with the direction of the trend, which is probably not an uptrend.

If we are looking for selling opportunities, we have three chances:

1: Kijun-Sen crosses up Tenkan-Sen (seling signal) below the Kumo. This is a very strong selling signal, because it agrees with the direction of the trend, which is a downtrend.

2: Kijun-Sen crosses up Tenkan-Sen inside the Kumo. This is considered to be an average-strength selling signal.

3: Kijun-Sen crosses up Tenkan-Sen above the Kumo, which is considered to be a weak selling signal, because it disagrees with the direction of the trend, which is probably an uptrend.

What is Ichimokus Chinkou-Span?

Chinkou-Span is basically the current price plotted 26 periods earlier.

If the current price is (slightly) higher than the lastest piece of Chinkou-Span, this is a bullish signal.

3profitable ichimoku trading strategies

3profitable ichimoku trading strategies3 Profitable Ichimoku Trading Strategies

By Tradinformed on December 22, 2014

In this article I show three strategies using the Ichimoku trading system. I then show the results of how these trading strategies perform on the EUR/USD forex pair.

I carried out these analyses to find out how good the Ichimoku system is at identifying trends. The trading strategies are simple and do not require any judgement or special analysis.

Ichimoku Kinko Hyo

Ichimoku is a trading system that originated in Japan. Developed by journalist Goichi Hosoda, it is designed to help traders identify and trade with the dominant trend. The lines look quite complicated on the chart but they can be easily used as part of an automated trading strategy.

Conversion and Base Line

The red line is the Conversion Line (tenkan sen) and is the quickest to react. The blue line is the Base Line (kijun sen). The Base Line is slower and is useful for confirmation.

Ichimoku Cloud

The most unusual thing about the Ichimoku is the cloud. The cloud is a slow moving area on the chart that helps to identify the trend and provides support and resistance.

The cloud is made up of two lines: Senkou A and Senkou B. Senkou A is the fastest and makes the inner edge of the cloud. Senkou B is slower and makes the outer edge.

Chikou Span

The Chikou Span is the green line. It is made by plotting the closing price 26 periods back.

The Ichimoku Trading Strategies

All three trading strategies are either long or short. Each trading strategy starts with capital of $100,000. The rules of the strategies are:

Strategy 1: Trade long when the Conversion Line crosses above the Base Line. Trade short when the Conversion Line crosses below the Base Line.

Strategy 2: Trade Long when the Closing Price crosses above the Base Line. Trade Short when the Closing Price crosses below the Base Line.

Strategy 3: Trade Long when the Closing Price crosses above the Senkou Span B line (slow cloud line). Trade Short when the Closing Price crosses below the Senkou Span B line.

The backtests have been carried out using Excel. The calculations for the Ichimoku are contained in my eBook: 21 More Technical Indicators. The eBook explains how the lines are calculated and contains a free Excel spreadsheet with all the formulas.

If you are interested in using Excel to backtest trading strategies you could check out my eBook course: How to Backtest a Trading Strategy Using Excel. If you are interested in the spreadsheet used in this analysis see the page on Excel Spreadsheets .

The data used for the backtest is the EUR/USD forex pair on the daily timeframe. The data is tested from May 1992 to December 2014.

The results of the three trading strategies are:

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Japanese candles trading strategy

Japanese candles trading strategyJapanese Candles Trading Strategy

Last Updated: November 23, 2012 by Martin

An Introduction to Japanese Candles Trading Strategy

The Japanese candles trading strategy is among the many fundamental and key trading analysis that are used in majority of trading and Forex trading systems. The candles strategy is a basic chart that involves various key aspects and components that enables one to understand its flow and hence be able to derive information from it. It has its own unique methods and symbols that are used to represent information on it.

Features of Japanese candles trading strategy

The candles strategy uses the following key features that make it possible for the trader to be able to have a clear interpretation of the trend that it resembles.

The real body enables the trader to identify the opening and closing price of a particular commodity. Here the trader is able to identify clearly whether the close is lower than the opening over a certain duration of time and also whether the close is on top of the opening. This makes it possible for the trader to get a clear picture of the general performance of the business.

The shadow is a line that signifies an increase or a decrease in the price of a particular commodity that is being traded over a given period of time.

Patterns of Japanese candles trading strategy

The candles trading strategy mainly works on the basis of providing patterns that are interpreted by the trader in order to come up with a concrete conclusion regarding the market characteristics and behavior. These patterns include:

Hammer pattern - It is mainly characterized by having a relatively small real body as compared to a wider and longer low shadow. It is interpreted by traders as being a negative drift in trading activities in the market.

Engulfing pattern - In this pattern, the market performance is interpreted by the real body that engulf the performance of previous day’s performance.

Dark-cloud cover - In this pattern, there is a resilient cloud cover on the market performance during the first day of trading.

Hanging man It resembles the hammer pattern with the difference being on the framework forming an uptrend pattern.

Bearish pattern - In this pattern, a dark cloud usually forms on the previous day’s marketing trend.

Piercing pattern - The pattern formed is usually a complete opposite of the dark-cloud pattern. It usually forms a down trend.

Each of the patterns used in the Japanese candles trading strategy is usually distinct. The trader can mix between any two patterns and see the outcome. A modification can be made in the patterns to ensure that one gets the best candle strategy to suit their business.