Ichimoku Beginner by Gabor Kovacs

Ichimoku World Book Series
Volume One
Ichimoku Beginner
Gabor Kovacs
2010
http://www.ichimokuworld.com 2
Copyright 2010 by Gabor Kovacs. All rights rsrvd.
!irst publishd i" #cmbr 2010 by Gabor Kovacs.
http://www.ichimokuworld.com
$o part o% this book may b rproducd or tra"smittd i"
a"y %orm or by a"y ma"s& lctro"ic or mcha"ical&
i"cludi"g photocopyi"g& rcordi"g or by a"y i"%ormatio"
storag a"d rtrival systm& without prior prmissio" i"
writi"g %rom th publishr. 'owvr you can share
this book anytime with anyone for free.
(imit o% (iability/#isclaimr o% )arra"ty
)hil th author has usd his bst %%orts i" prpari"g
this book& h maks "o rprs"tatio"s or warra"tis
with rspct to th accuracy or complt"ss o% th
co"t"ts o% this book a"d spci%ically disclaim a"y
implid warra"tis o% mrcha"tability or %it"ss %or a
particular purpos.
*his i"%ormatio" has b" prpard to provid g"ral
i"%ormatio" o"ly. +t is "ot i"t"dd to tak th plac o%
pro%ssio"al advic a"d you should "ot tak actio" o"
spci%ic issus i" rlia"c o" this i"%ormatio". +"
prpari"g this i"%ormatio"& w did "ot tak i"to accou"t
th i"vstm"t ob,ctivs& %i"a"cial situatio" or
particular "ds o% a"y particular prso".
-%or maki"g a" i"vstm"t dcisio"& you "d to
co"sidr .with or without th assista"c o% a" advisr/
whthr this i"%ormatio" is appropriat to your "ds&
ob,ctivs a"d circumsta"cs.
I dedicate this book to Angelika,
without whose assistance, advice and suort
this book wouldn!t be ossible.
"O#$%#$S
I#$&O'("$IO# )
*A&$ O#% +%$$I#+ $O ,#OW $-% I"-I.O,( .%$-O' /
)hat is +chimoku Ki"ko 'yo 0
1tti"g up th charts 12
*A&$ $WO BASI" "-A&$ A#A01SIS 2)
3si"g +chimoku as a charti"g systm 14
3si"g +chimoku as a tradi"g systm 20
Crati"g your %irst basic +chimoku a"alysis 22
56ampl a"alyss 27
*A&$ $-&%% *&A"$I"% 3)
56rciss 84
A"swr Ky 9:
4I#A0 WO&'S )3
Introduction
*h +chimoku )orld -ook 1ris is a sris o% thr books&
ach writt" at th right lvl %or you at ach stag i" your
study o% th +chimoku Ki"ko 'yo systm.
*h +chimoku -gi""r was writt" spcially %or thos& who
ar compltly "w to th +chimoku mthod. *h book is
dvidd i"to thr mai" parts& ach o% which covrs a"
importa"t topic o% basic +chimoku tradi"g.
*h Gtti"g to K"ow th +chimoku ;thod chaptr
i"troducs th +chimoku Ki"ko 'yo systm. Also it hlps to
st up th charts with th +chimoku i"dicator& a"d 6plai"s
th compo""ts o% th systm.
*h -asic Chart A"alysis chaptr tachs how to crat a
basic chart a"alysis with +chimoku& shows how to us it as a
charti"g systm a"d 6plai"s how to %i"d 6act "try
opportu"itis with th hlp o% it.
*h <ractic sctio" at th "d o% th book givs th
opportu"ity %or practic a"d "abl you to assss how much
you hav lar"d. A"swrs to th 6rciss ar giv" at th
back o% th book.
*o %i"d mor a"alyss& 6pla"atio"s& lar"i"g matrials a"d
vidos i" co""cti"g with th way + trad th +chimoku
systm& plas visit th +chimoku )orld wbsit at
http://www.ichimokuworld.com
'av a grat tim radi"g this book=
+abor ,ovacs
<art >"
Gtti"g to K"ow th +chimoku
;thod
What is Ichimoku
,inko -yo5
+chimoku Ki"ko 'yo is a multi%u"ctio"al visual tr"d
%ollowi"g charti"g systm. +t m"tio"d to b th ki"g o% th
i"dicators a"d tradi"g or a"aly?i"g with it is a ki"d o% high@
lvl art.
What does it!s name
mean5
+chimoku ma"s: o" gla"c& Ki"ko ma"s: Auilibrium .or
bala"c/& a"d 'yo ma"s: chart. *h trm +chimoku Ki"ko
'yo could b tra"slatd as: B>" gla"c Auilibrium chartB&
or BChart bala"c at a gla"cB.
Who created the
Ichimoku ,inko -yo
system5
+t was dvlopd by a Capa"s co"omic ,our"alist& "am
Goichi 'osoda& who aimd to crat a ki"d o% Dall@i"@o"E
i"dicator to a"aly? th charts mor dply but i" lss tim.
*h dvlopm"t o% th systm was a hug a"d compl6
work& as thr was "o possibility %or doi"g automatd back
tsts at that tim. Goichi 'osoda startd th procss b%or
th 1co"d )orld )ar& with a larg group o% hird stud"ts&
who had to ma"ually backtst th di%%r"t calculatd
%ormulas. !i"ally& a%tr mor th" tw"ty yars o% tsti"g a"d
chisli"g& 'osoda prs"td th +chimoku Ki"ko 'yo
charti"g systm i" his book i" 1:7:& a"d it rapidly bcam
th most %rAu"tly usd i"dicator i" Capa"s tradi"g
rooms.
Why is the system so
secial5
)ith +chimoku& it is possibl to gt th whol pictur o% th
markt& i"cludi"g tr"d dirctio"& th mai"
support/rsista"c lvls& a"d 6act "try or 6it poi"ts. +t
also hlps to d%i" th str"gth o% th sig"al. +t is also
importa"t& that +chimoku ca" b usd succss%ully %or all
markts a"d o" all tim %rams& but F lik most i"dicators @
it pr%orms a bit bttr o" th highr o"s.
Is it ossible to read
the original book of
+oichi -osoda in
%nglish5
3"%ortu"atlly "o& as th origi"al +chimoku books a"d
matrials hav "vr b" tra"slatd i"to 5"glish. ;a"y
blivs& that ths matrials ar curr"tly stord i" a scrt
sa% o% th -a"k o% Capa". Also& it is a gossip& that th whol
mthod dscribd i" 'osodaBs book was "vr b" shard
%ully with th public& a"d thr might could b a scrt bo"us
compo""t o% th systm. 'owvr ths gossips wr "vr
co"%irmd o%%icially.
Is it a stand6alone
system5
+chimoku Ki"ko 'yo ca" b usd i" ma"y ways. +t ca" b
usd as a sta"d@alo" systm& or it ca" b usd as a tr"d a"d
pric bhaviour a"alysr a"d ca" b combi"d with a"y
tradi"g systms or stratgis. +t also ca" b usd as a" "try
sig"al g"rator& or it ca" b usd to %iltr th sig"als o%
a"othr tradi"g systm. !urthrmor& as tradi"g +chimoku is
a ki"d o% high@lvl art& a"d art is Auit a sub,ctiv thi"g&
vry +chimoku tradr trads th +chimoku a bit di%%r"tly.
+chimoku with a commrcial tradi"g systm.
+chimoku with a"othr Capa"s systm& th G"ko.
What official sources
use Ichimoku regularly
for chart analysis5
Cust to m"tio" a %w %rom th biggr "ws sourcs:
-ow can I add the
Ichimoku indicator to
my .$3 charts5
1. #ow"load a"d i"stall th %r ;tatradr8 .;*8/
plat%orm. Hou ca" choos a"y brokr that supports
;tatradr8 such as Alpari& +"trba"k!I& !I##& !I<ro tc.
!l %r to us your 6isti"g brokrag accou"t or choos
o" by yoursl%.
2. >p" your ;tatradr8.
2. >" th $avigator pa"l o% your ;tatradr choos
+"dicatorsJ +chimoku& a"d add it to you chart.s/.
What are the standard
settings of Ichimoku
and why5
*h sta"dard stti"gs o% ar: :@27@92. *h bas "umbr o%
th %ormula is 27. *h commo" viw is that th "umbr 27
rprs"ts a sta"dard Capa"s busi"ss mo"th .which
i"cludd 1aturdays/& th "umbr : rprs"ts a wk a"d a
hal% a"d th "umbr 92 rprs"ts two mo"ths. 1om hold
di%%r"t viws a"d says that th calculatio" o% Goichi
'osoda basd o" @ amo"g othrs @ ;oo" cycls& as th
"umbr 27 is th bst appro6imat "umbr to 6prss a %ull
;oo" cycl& th "umbr : rprs"ts o" a"d a hal% Auartr
;oo" cycl& a"d "umbr 92 rprs"ts a doubl ;oo" cycl.
Is it ossible to use
alternative setting
values5
Hs& it is possibl. 1om tradrs us th valus o% 2@22@88&
howvr th rcomm"dd stti"gs ar still th origi"al
valus.
What are the
comonents of the
Ichimoku ,inko -yo
system5
+chimoku Ki"ko 'yo is co"stitutd by %iv li"s:
@ *h $enkan6Sen .Co"vrsio" li"/ is calculatd as
.'ighst 'igh K (owst (ow//2 %or th past : priods.
@ *h ,i7un6Sen .1ta"dard li"/ is calculatd as .'ighst
'igh K (owst (ow//2 %or th past 27 priods.
@ *h "hikou San .(aggi"g 1pa"/ is calculatd as curr"t
pric tim@shi%td backwards 27 priods.
@ *h Senkou San A .!astr 1pa" A/ is calculatd as
.*"ka"@1" K Ki,u"@1"//2.
@ *h Senkou San B .!astr 1pa" -/ is calculatd as
.'ighst 'igh K (owst (ow//2.
Is it necessary to learn
the 8aanese name of
the elements5
+t is vry importa"t to lar" th 6act Capa"s "am o% th
+chimoku li"s& also it is a must to b abl to id"tit%y th
li"s at a gal"c wh" thy ar o" a chart.
<las rad th %ollowi"g chaptrs o"ly& i% you hav %ully
u"drstood a"d mastrd th i"%ormatio"s o% this chaptr. +%
you hav to thi"k about which li" is which& plas co"ti"u
practici"g th trmi"ology a"d th id"ti%icatio" o% th li"s
b%or co"ti"ui"g to th "6t chaptrs.
<art *wo
-asic Chart A"alysis
(sing Ichimoku as a
charting system
)h" w us th +chimoku Ki"ko 'yo systm as a charti"g
systm& w do"Bt wa"t to gt "try or 6it sig"als& but w
wa"t to gt importa"t i"%ormatio"s about th markt& %or
6ampl th tr"d dirctio"& th %utur possibilitis a"d th
mai" support a"d rsista"c lvls.
Identifying the trend
D*r"d is your %ri"dE @ this is o" o% th basic a"d widly
k"ow" co"cpts o% th tch"ical a"alysis. 'owvr
u"%ortu"atly it is "ot ,ust that asy. *r"ds spctacularly
sta"d out o" historical charts& but id"ti%yi"g a tr"d i" th
bgi""i"g o% it is o" o% th hardst tasks i" chart a"alysis.
*his %ollowi"g %w paragraphs will show how tr"ds ca" b
spottd out with +chimoku Ki"ko 'yo.
Analy9ing the ,umo
*h lattr two li"s F 1"kou 1pa" A a"d 1"kou 1pa" - F
%orm th u"iAu Kumo %atur o% th systm. *o i"d"ti%y
th tr"d& th %irst thi"g is to obsrv this compo""t o" itBs
ow" a"d vrsus th othr compo""ts a"d th pric.
a/ *h color o% th Kumo
+% 1"kou 1pa" A is abov 1"kou 1pa" -& th color o% th
Kumo is light a"d it i"dicats a possibl bullish tr"d. +% th
1"kou 1pa" A is blow 1"kou 1pa" -& th Kumo color is
dark a"d th tr"d is i"dicatd as barish. )h" 1"kou
1pa" A crosss 1"kou 1pa" - th color o% th Kumo
cha"gs& a"d it raiss th plausibility o% a possibl tr"d
cha"g.
b/ *h thick"ss o% th Kumo
*h thickr th Kumo& th stro"gr th tr"d is. A sig"i%ica"t
Kumo ma"s stro"g tr"d a"d a ti"y Kumo i"dicats a wak
tr"d& as it is mor asy %or th pric to mov through a thi"
Cloud tha" a thick o". 'owvr it is importa"t to kp i"
mi"d& that th top a"d th bottom o% th Kumo ma"
support a"d rsista"c li"s& so v" a thi" Kumo ca" tur"
th pric back to itBs prvious dirctio"& howvr th cha"cs
ar lowr.
c/ *h Kumo vrsus pric
>" o% th most basic %u"dam"tals o% +chimoku is: i% th
pric is abov th Kumo& th tr"d is bullish& a"d i% th pric
is blow th Kumo& th tr"d is barish. +t is vry visibl a"d
asy to dtrmi"at i% th ovrall tr"d is bullish or barish
with this mthod. +t %ollows that vry tr"d bgi"s with a
Kumo brakout& wh" pric braks out %rom th Kumo cloud
o" th upsid or o" th dow"sid& howvr %or a pr%ctly
%ormd Kumo brakout Chikou 1pa" has to brak out %rom
th Kumo too to co"%irm th dirctio". )h" pric is movi"g
i" th body o% th Cloud& it shows susp"s i" th tr"d.
d/ *h Kumo vrsus Chikou 1pa"
Chikou 1pa" ca" b abov th Kumo .bullish tr"d/& blow
th Kumo .barish tr"d/ or i" th Kumo ."utral&
u"dcidd tr"d/. Chikou 1pa" is a vry importa"t tr"d
co"%irmatio" tool& so it is "cssary to always rcko" with
th chart a"alysis.
/ *h Kumo vrsus Ki,u"@1" a"d *"ka"@1"
'owvr th positio" o% Ki,u"@1" a"d *"ka"@1" is
usually compard to th pric& itBs plac vrsus th Kumo ca"
b th i"dicator o% th str"gth o% th tr"d too. +% ths li"s
ar 6trudi"g o" th upsid o% th Kumo& it supports %urthr
bullish tr"d. *h opposit o% it supports th co"ti"uatio" o%
th barish tr"d.
"omaring the other
comonents versus
rice
) hav alrady compard th Kumo vrsus pric. $ow ltBs
do th sam with th othr compo""ts o% +chimoku.
a/ Chikou 1pa" vrsus pric
+% th Chikou 1pa" crosss up th pric it ca" b cou"td as a
bullish sig"& a"d vic vrsa. +% th pric is o" th upsid o%
th Kumo a"d Chikou 1pa" crosss it up& it is a vry stro"g
sig" o% th possibility o% a lo"gtrm uptr"d& a"d th
opposit o% it i"dicats a stro"g dow"tr"d. +% Chikou 1pa"
is i" th Kumo& th tr"d is u"dcidd& bcaus th 1"kou
1pa" A a"d 1"kou 1pa" - support a"d rsista"c li"s ca"
a%%ct to it stro"gly& a"d Chikou 1pa" ca" bou"c th pric
back v" it has alrady brok" out %rom th body o% th
Cloud.
b/ Ki,u"@1" vrsus pric
*h Ki,u"@1" is bhavi"g as a a vry stro"g support or
rsista"c lvl so it is a vry importa"t tool o% id"ti%yi"g
tr"d cha"gs. +% pric crosss it up& this is a bullish sig"& i%
pric crosss it dow"& that is a barish sig". A bullish cross
ca" happ" abov th Kumo .stro"g sig"/& i" th Kumo
."utral sig"/& or blow th Kumo .wak sig"/& a"d vic
vrsa. *h dista"c btw" <ric a"d Ki,u"@1" ca" b vry
tlli"g too& as i% pric lavs bhi"d Ki,u"@1" %ar away& it
usually tur"s %lat a"d attracts back th pric to crat
Auilibrium. <las "otic& that this is "ot a sig" o% th tr"d
cha"g& but o"ly a bou"c& a"d a%tr th harmo"y o% th
Ki,u"@1" a"d pric was rstord& thy usually mov i" th
dirctio" o% th tr"d agai".
c/ *"ka"@1" vrsus pric
*"ka"@1" is mor s"sitiv to mi"or pric movm"ts& as
it rprs"ts th mom"tum& howvr it ca" b usd as a
tr"d@co"%irmatio" tool too. !or 6ampl i% pric is i" a
tr"d& it usually crats wavs& a"d movs back through
*"ka"@1" to Ki,u"@1"& th" bou"cs i"to th dirctio" o%
th tr"d agai". +% pric movs through *"ka"@1" i" th
dirctio" o% th tr"d i" th cours o% a bou"c& it co"%irms
th co"ti"uatio" o% th tr"d.
d/ Chikou 1pa" vrsus Ki,u"@1"
Chikou 1pa" ca" b abov .bullish sig"/& or blow .barish
sig"/ Ki,u"@1". As Ki,u"@1" is a vry stro"g
support/rsista"c lvl& as lo"g as th Chikou 1pa" is abov
it th bullish movm"ts ar wll supportd& a"d i% Chikou
1pa" is stayi"g blow Ki,u"@1"& th dow" movm"ts ar
supportd. +t is vry commo"& that Chikou 1pa" is bou"ci"g
o" th Ki,u"@1" b%or a hug mov happ"s.
/ *"ka"@1" vrsus Ki,u"@1"
A *"ka"@1"/ Ki,u"@1" cross ca" also i"dicat th cha"g
or th co"ti"uatio" o% th tr"d. A" up cross ca" happ"
abov th Kumo .stro"g sig"al/& i" th body o% th Kumo
."utral sig"al/& or blow th Kumo .wak sig"al/ a"d vic
vrsa.
$he icture of the
ideal trend
'owvr th compo""ts o% th +chimoku Ki"ko 'yo systm
wr dscribd sparatly& it is i"disp"sabl to us both
compo""ts togthr to s th ovrall tr"d a"d th whol
pictur at a gla"c.
+t %ollows that th dscriptio" o% a" idal bullish tr"d sig"
or co"%irmatio" would b:
1. th pric is abov th Kumo& *"ka"@1" a"d Ki,u"@1"
2. th Kumo is thick a"d bullish
2. th *"ka"@1" has crossd up Ki,u"@1" abov th
Kumo
8. th Chikou 1pa" is abov both Kumo& *"ka"@1"&
Ki,u"@1" a"d pric
*h pictur o% a" idal barish tr"d would b:
1. th pric is blow th Kumo& *"ka"@1" a"d Ki,u"@1"
2. th Kumo is thick a"d barish
2. th *"ka"@1" has crossd dow" Ki,u"@1" blow th
Kumo
8. th Chikou 1pa" is blow both Kumo& *"ka"@1"&
Ki,u"@1" a"d pric
+dal barish tr"d.
$he signs of trend
weakening
Ggardi"g to th prviously dscribd idal bullish tr"d& th
sig"s o% th tr"d wak"i"g would b:
1. Chikou 1pa" movs blow Ki,u"@1"
2. <ric movs blow *"ka"@1"& th" Ki,u"@1"
2. *"ka"@1" crosss dow" Ki,u"@1"
8. -oth Chikou 1pa"& *"ka"@1"& Ki,u"@1" a"d pric
movs i"to th body o% th Kumo
9. *h Kumo tur"s barish .dark/
!i"ally& i% pric braks out %rom th Cloud o" th dow"sid
with at last th co"%irmatio" o% th Chikou 1pa"& a
complt cha"g o% th tr"d .%rom bullish to barish/ ca"
b diag"osd.
Ggardi"g to th prviously dscribd idal barish tr"d&
th sig"s o% th tr"d wak"i"g would b:
1. Chikou 1pa" movs abov Ki,u"@1"
2. <ric movs abov *"ka"@1"& th" Ki,u"@1"
2. *"ka"@1" crosss up Ki,u"@1"
8. -oth Chikou 1pa"& *"ka"@1"& Ki,u"@1" a"d pric
movs i"to th body o% th Kumo
9. *h Kumo tur"s bullish .light/
!i"ally& i% pric braks out %rom th Cloud o" th upsid with
at last th co"%irmatio" o% th Chikou 1pa"& a complt
cha"g o% th tr"d .%rom barish to bullish/ ca" b
diag"osd.
Identifying suort
and resistance levels
All +chimoku li"s ar support a"d rsista"c li"s& howvr
thy do"Bt hav th sam str"ght.
Ggardi"g to th prviously dscribd idal bullish tr"d&
th str"gth ordr o% th support lvls .i" dsc"di"g
ordr/ would b:
1. *h bottom o% th Kumo
2. *h top o% th Kumo
2. *h Ki,u"@1"
8. *h *"ka"@1"
Ggardi"g to th prviously dscribd idal barish tr"d&
th str"gth ordr o% th support lvls .i" dsc"di"g
ordr/ would b:
2. *h Ki,u"@1"
8. *h *"ka"@1"
(sing Ichimoku as a
trading system
)h" w us th +chimoku Ki"ko 'yo systm as a tradi"g
systm& w do"Bt ,ust wa"t to gt importa"t i"%ormatio"s
about th markt& but w also wa"t to gt 6act "try a"d
6it sig"als %rom it.
+" this book + will o"ly 6plai" th two most commo"ly usd
"try tch"iAus what ar rcomm"dd %or bgi""rs.
$enkan6Sen:,i7un6Sen
cross
1tro"g buy sig"al: cross happ"s abov th Kumo
1tro"g sll sig"al: cross happ"s blow th Kumo
$utral buy/sll sig"al: cross happ"s i" th body o% th
Kumo
)ak buy sig"al: cross happ"s blow th Kumo
)ak sll sig"al: cross happ"s abov th Kumo
5"try:
@ cross happ"s .pr%r stro"g crosss/
@ th othr +chimoku compo""ts ar supporti"g th
dirctio" .as dscribd i" th *r"d tradi"g chaptr/.
,umo breakout
) ar talki"g about a valid Kumo brakout& i% th pric
braks out %rom th body o% th Kumo .closs outsid o% it/&
A$# th Chikou 1pa" co"%irms th mov. +% th pric braks
out %rom th Kumo& but th Chikou 1pa" dos"Bt& w call it a
%ak brakout or a %ak@out. +% th othr compo""ts ar
supporti"g th mov too& it maks th sig"al mor stro"gr.
4iltering ranging
eriods
Choppy markts ar th worst "ightmar o% most tradrs. -y
th hlp o% th u"iAu Kumo %atur o% th +chimoku systm&
ra"gi"g priods o% th markt ca" b %iltrd out with mor
succss. +% pric marchs i"to th body o% th Kumo& it
ma"s th tr"d is u"dcidd& a"d ra"g is probabl. +t is
"ot rcomm"dd to "tr i"to a"y positio"& wh" pric is
movi"g i" th Kumo. *h sam applis to Chikou 1pa". +t
dos"Bt mattr& i% pric has alrady brok" out %rom th
Kumo& i% th Chikou 1pa" is still thr. +t is vry usual& that
Chikou 1pa" bou"cs back %rom th bordr o% th Kumo a"d
pulls th pric back to itBs prvious dirctio".
$he timeframe
;uestion
$aturally a" id"ti%id tr"d o" th highr tim %rams ca"
hold mor pot"cy a"d str"gth& tha" o" th shortr tim
%rams. +t %ollows that also a Kumo brakout or a *"ka"@
1"/Ki,u"@1" cross is mor rlva"t o" th highr tim
%rams tha" o" th shortr o"s. !urthrmor& th highr
tim %ramBs +chimoku compo""ts usually %%ct to th
+chimoku li"s o" th lowr tim %rams. !or 6ampl& it is
typical& that th valu o% th #aily chartBs Ki,u"@1" is th
6act valu o% th '8 chartBs Kumo top. +" that cas i% pric
closs blow th #aily Ki,u"@1"& it also ma"s that it
"trd i"to th Kumo o" th '8 chart.
Where to ut the Sto
0oss5
Hou should always us a stop loss& "o mattr what. 5v" with
+chimoku. +" th support/rsista"c li"s chaptr +
dscribd that th stro"gst support/rsista"c li" is th
othr sid o% th Kumo. +t %ollows that it is a good ida to put
th sa%ty stop to that lvl K a %w pips bu%%r. +t is also a
commo"ly usd tch"iAu to put th stop loss to th last
high/low K bu%%r& or th last rou"d "umbr lvl K bu%%r.
When to close a
osition5
A positio" is closd by th stop loss& or ca" b closd
ma"ually .usually i" pro%it/. *hr ar ma"y good
tch"iAus rgardi"g to th tak pro%it targti"g& i" this book
+ will o"ly m"tio" a %w basic o"s that ar mostly
rcomm"dd %or bgi""rs& a"d + will go dpr i" this
topic i" th "6t volum o% th book sris.
*h thr mai" basic mthods to clos positio" ar:
clos i% th pric crosss back th Ki,u"@1"
clos i% it rachs a rou"d "umbr lvl
clos a%tr 6 amou"t o% pips i" pro%it.
"reating your first
basic Ichimoku
analysis
*h hardst thi"g %or +chimoku bgi""rs ar crati"g valid
basic a"alyss. *h raso" is that th pictur a"d tr"d is
usually "ot as idalistic as w hav lar"d i" th prvoius
sctio"s. !or 6ampl what i% th pric is u"dr th Kumo&
th Chikou 1pa" is u"dr th Kumo too& put abov th pric&
*"ka"@1" is blow Ki,u"@1"& a"d th Kumo %utur is
bullish. )hich sig"als has mor rlva"cL Also& what i% th
'8 charts ar compltly barish& but th 9; charts ar
clarly bullishL
$he minimum
re;uirements
*hs ar th mi"imum rAuirm"ts that you should
always chck to b abl to mak a tradi"g dcisio" with
+chimoku:
th pric vs Kumo
*"ka"@1" vs Ki,u"@1"
Chikou 1pa" vs Kumo& <ric a"d Ki,u"@1"
Kumo %utur
*hs ar th mi"imum rAuirm"ts. Always chck thm i"
this ordr. +% ths paramtrs ar showi"g th sam& you
ca" "tr with a *"ka"@1"/Ki,u"@1" cross or with a
Kumo brakout. +% you %i"d that %or 6ampl th *"ka"@1"
a"d Ki,u"@1" ar braki"g out %rom th Kumo too& it ca"
cou"t as a bo"us co"%irmatio" o% th tr"d. -ut th
mi"imum rAuirm"ts ar o"ly th %our prviously
m"tio"d o"s. +% you %i"d that thr o% thm ar showi"g
th sam& but %or 6ampl *"ka"@1" crossd Ki,u"@1" i"
th opposit dirctio"& do "ot "tr till it starts to support
th dirctio" o% th othr thr compo""ts too.
$he higher timeframes
+t is always rcomm"dd to trad o"ly i" th dirctio" o%
th highr tim%rams. + would advic to chck at last two
highr tim%rams& so i% you %or 6ampl wa"t to "tr o"
th 19; tim%ram& chck th '1 a"d '8 charts %irst. +% you
"tr o" th '1 chart& th" chck th '8 a"d #aily charts
%irst& tc. )h" chcki"g th highr tim%rams& plas
chck at last th prvious %our mi"imum rAuirm"ts.
Always start %rom th highr tim %rams a"d procd to
lowr tim %rams th" a"d "vr "tr agai"st th highr
tim%rams. .+t is possibl to "tr agai"st thm with som
spcial +chimoku tch"iAus& but at this bgi""r stag th
bst thi"g is to always trad i" th dirctio" o% th highr
tr"d./
<las %l %r to us th %ollowi"g chat sht with your
daily tradi"g routi". 1tart %rom th top o% it a"d put a small
up or dow" arrow "6t to vry li"s ragrdi"g to that
tim%ramBs +chimoku. +% you hav 8 small arrows poi"ti"g
i"to th sam dirctio"& you ca" mov to th "6t .lowr/
tim%ram. +% you hav thr 8 small arrows poi"ti"g i"to th
sam dirctio" agai"& you ca" go to your "try tim%ram.
A"alys th charts with your chat sht a"d start to look %or
*"ka"@1"/Ki,u"@1" crosss or Kumo brakouts thr.
"-%A$ S-%%$
-igher timeframe 2
<e.g. -3=
<ric vs Kumo
*"ka"@1" vs Ki,u"@1"
Kumo %utur
-igher timeframe >
<e.g. -2=
<ric vs Kumo
*"ka"@1" vs Ki,u"@1"
Kumo %utur
%ntry $imeframe
<e.g. .2?=
<ric vs Kumo
*"ka"@1" vs Ki,u"@1"
Kumo %utur
%@amle analysis 2.
'ighr tim%ram 1. .'8/
<ric vs Kumo (*
*"ka"@1" vs Ki,u"@1" (*
Chikou 1pa" vs Kumo& <ric a"d Ki,u"@1" (*
Kumo %utur (*
-igher timeframe >.
<-2=
<ric vs Kumo (*
*"ka"@1" vs Ki,u"@1" (*
Kumo %utur (*
%ntry timeframe <.2?=
<ric vs Kumo (*
*"ka"@1" vs Ki,u"@1" (*
Kumo %utur (*
%ntry strategyA Kumo brakout a"d/or *"ka"@
1"/Ki,u"@1" cross
Sto 0ossA at th bottom o% th Kumo K bu%%r
%@it strategyA rou"d "umbr lvl& or pric/Ki,u"@1"
cross
%@amle analysis >.
-igher timeframe 2.
<-3=
<ric vs Kumo 'OW#
*"ka"@1" vs Ki,u"@1" 'OW#
Chikou 1pa" vs Kumo& <ric a"d Ki,u"@1" 'OW#
Kumo %utur 'OW#
-igher timeframe >.
<-2=
<ric vs Kumo 'OW#
*"ka"@1" vs Ki,u"@1" 'OW#
Kumo %utur 'OW#
<ric vs Kumo 'OW#
*"ka"@1" vs Ki,u"@1" 'OW#
Kumo %utur 'OW#
1"/Ki,u"@1" cross
Sto 0ossA at th top o% th Kumo K bu%%r
%@it strategyA rou"d "umbr lvl
%@amle analysis B.
-igher timeframe 2.
<-3=
<ric vs Kumo (*
*"ka"@1" vs Ki,u"@1" (*
Kumo %utur (*
-igher timeframe >.
<-2=
<ric vs Kumo (*
*"ka"@1" vs Ki,u"@1" (*
Kumo %utur (*
<ric vs Kumo (*
*"ka"@1" vs Ki,u"@1" (*
Kumo %utur (*
%ntry strategyA Kumo brakout
%@it strategyA pric/Ki,u"@1" cross
%@amle analysis 3.
-igher timeframe 2.
<-3=
<ric vs Kumo (*
*"ka"@1" vs Ki,u"@1" (*
Kumo %utur (*
-igher timeframe >.
<-2=
<ric vs Kumo (*
*"ka"@1" vs Ki,u"@1" (*
Kumo %utur (*
<ric vs Kumo (*
*"ka"@1" vs Ki,u"@1" (*
Kumo %utur (*
%ntry strategyA Kumo brakout
%@it strategyA rou"d "umbr lvl& or pric/Ki,u"@1"
cross
%@amle analysis ?.
-igher timeframe 2.
<-3=
<ric vs Kumo 'OW#
*"ka"@1" vs Ki,u"@1" 'OW#
Kumo %utur 'OW#
-igher timeframe >.
<-2=
<ric vs Kumo 'OW#
*"ka"@1" vs Ki,u"@1" 'OW#
Kumo %utur 'OW#
<ric vs Kumo 'OW#
*"ka"@1" vs Ki,u"@1" 'OW#
Kumo %utur 'OW#
1"/Ki,u"@1" cross
%@it strategyA pric/Ki,u"@1" cross
<art *hr
<ractic
%@erciese 2.
What is the name of the Ichimoku comonents5
*lease write the names ne@t to the correct numbers.
2.A
>.A
B.A
3.A
?.A
).A
%@erciese >.
Is the trend currently bullish or bearish5
Why5 *lease give at least 3 e@lanations.
$he trend is C........................ becauseA
2.A
>.A
B.A
3.A
%@erciese B.
What are the most imortant resistance levels on
this icture5
.ention the B most imortant ones in descending
order.
2.A
>.A
B.A
%@erciese 3.
A.= Which strategy did we use when we entered at
the candle marked with the arrow5
AnswerA
C.............................................................................
B.= In the red circle you can see a $enkan6Sen:,i7un6
Sen cross. But we haven!t entered there. Why5
*lease mention the one .OS$ imortant reason.
AnswerA
C.............................................................................
%@erciese ?.
Which strategy did we use when we entered at the
candle marked with the arrow5 Was it a correct
entry5 Why5
$he name of the strategyA
C.............................................................................
"orrect enty or notA
C.............................................................................
Why5
C.............................................................................
%@erciese ).
*rice broke out from the ,umo with a sectacular
bullish candle. Is it a good idea to enter now5 Why5
AnswerA
C............................................................................
Why5
C............................................................................
%@erciese /.
Which one is the only good entry5 Why5
AnswerA
C..............................................................................
WhyA
C.............................................................................
%@erciese D.
We have entered long after the close of the marked
candle. Where do we have to ut the safety Sto
0oss5
AnswerA
C..............................................................................
%@erciese E.
&egarding to the revious chart, we have entered
with the marked candle and now we are in rofit.
When should we close the osition if we use only
Ichimoku <no round number levels, etc=5
AnswerA
C..............................................................................
%@erciese 2F.
$ow look at th %ollowi"g two charts. +t is tim to crat your
%irst ow" a"alyss. *h %irst chart shows th ."arly/ whol
2010 yar o" th 53G31# #aily tim%ram. *h sco"d
chart shows th ."arly/ whol 2010 yar o" th 31#C<H
)kly tim%ram.
<las do th %ull dtaild a"alysis o% th 2010 yar rgardi"g
to ths charts. 1tart %rom th black li" o" th l%t
.01.01.2010/& a"d a"alys vry movm"t with th
+chimoku till th "d o% th chart. <las 6plai" what
happ"d& a"d why happ"d. - pro%ssio"al. A%tr you
hav mad your %irst two high Auality a"alyss& you ca" start
practici"g what you hav lar"d hr o" a dmo accou"t.
)h" you ar rady with th a"alyss& you ca" compar
thm with my rtrospct a"alysis what you ca" %i"d i" th
2011 Ca"uary ditio" o% th !I *radr ;aga?i"& or
altr"ativly you ca" s"d it back to m
.gabor.kovacsMichimokuworld.com/ a"d ask %or a rviw.
Analysis of the %(&(S' 'aily chart
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Analysis of the (S'8*1 Weekly chart
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A"swr Ky
%@erciese 2.
1.: *"ka"@1"
2.: Ki,u"@1"
2.: Chikou 1pa"
8.: 1"kou 1pa" A
9.: 1"kou 1pa" -
7.: Kumo
%@erciese >.
*h tr"d is -5AG+1' bcaus:
1. *h pric is blow th Kumo.
2. *"ka"@1" is blow Ki,u"@1"
2. Chikou 1pa" is blow Kumo& pric a"d Ki,u"@1"
8. *h Kumo %utur is barish .dark/.
%@erciese B.
2. *h Ki,u"@1"
%@erciese 3.
A./ ) usd th *"ka"@1"/Ki,u"@1" cross stratgy.
-./ +% pric marchs i"to th body o% th Kumo& it ma"s th
tr"d is u"dcidd& a"d ra"g is probabl. +t is "ot
rcomm"dd to "tr i"to a"y positio"& wh" pric is
movi"g i" th Kumo.
%@erciese ?.
) usd th Kumo -rakout stratgy. +t was a corrct "try&
as Chikou 1pa" co"%irmd th mov a"d all othr +chimoku
compo""ts wr supporti"g th mov too.
%@erciese ).
$o& it is "ot a good ida to "tr "ow& as a Kumo brakout is
valid o"ly i% at last th Chikou 1pa" co"%irms th mov.
'r th Chikou 1pa" was still i"/u"dr th Kumo& a"d look
what happ"d latr:
Chikou 1pa" was bou"cd back by th bottom o% th Kumo
.which is a stro"g rsista"c li" as you hav lar"d
prviously/. 1o th mov was o"ly a %akout. *hat is why you
should always co"%irm a Kumo brakout with .at last/ th
Chikou 1pa".
%@erciese /.
*h $o. 8. is th o"ly good "try& as Chikou 1pa" co"%irms
th mov a%tr th clos o% that ca"dl.
%@erciese D.
*o th bottom o% th Kumo K bu%%r. As i" this cas th last
low is "ar& it is also a good ida to put it u"dr th last low K
bu%%r.
%@erciese E.
) should clos th positio" wh" th pric crosss back th
Ki,u"@1".
4inal Words
*ha"k you %or radi"g th %irst volum o% th +chimoku
)orld -ook 1ris. + hop you %ou"d it us%ul a"d lar"d a
lot. +% you hav studid through this book& you ar "ot a"
+chimoku bgi""r a"ymor. 'owvr + would advis you to
rad it through at last o" mor tim to b sur you
u"drstood vrythi"g rightly. $ow you ca" start to practic
th k"owldg you gai"d o" a dmo accou"t.
<las kp i" mi"d& that th whol +chimoku systm is "ot
%ully covrd i" this book. *his is th basic k"owldg you
should mastr %irst to b abl to stp to th "6t lvl.
'owvr with this k"owldg you alrady ca" crat a basic
+chimoku chart a"alysis a"d you ar "ow abl to id"ti%y a
%w sa% "try opportu"itis.
*h "6t stag will b th sco"d volum o% th +chimoku
)orld -ook 1ris& th +chimoku 56prt. *ill th rlas o%
that book& plas %l %r to rad my rgular +chimoku
a"alyss o" my wbsit or o" th othr sourchs + publish& or
watch th ducatio"al vidos + hav cratd.
)ishi"g you ma"y succss i" your %irst stps with this
wo"dr%ul systm=
Gabor Kovacs

Ichimoku Beginner by Gabor Kovacs

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