ICHIMOKU

Kinko Hyo
For Professional Charting System
By: Radin Hisyamuddin M. Yassin

2nd Printing/edits – Syamrock FX Trading Technologies. Copyright of sfxt.blogspot.com All Right Reserves
 Ichimoku Kinko Hyo – For Professional Charting System by: Radin Hisyamuddin M. Yassin 1

Contents
1. About Ichimoku Kinko Hyo Page 2
a) History of Ichimoku Kinko Hyo
b) Key Elements of Ichimoku Charts
c) Function and Characteristic of Ichimoku Kinko Hyo

2. Why Ichimoku? Page 4

a) Complete system – Trend, Momentum and volatility
b) Perfect Entry and Exit
c) No need of other system or website signaling services
d) Learn how to predict the Market – Strong Market, Weak Market and Flat
e) Becoming a more professional Trader

3. Setting up Ichimoku Kinko Hyo Charts Page 5

a) Setting Parameters – Default parameters of 9, 26, 52
b) Creating Templates
c) Creating Profiles

4. Market Analysing with Ichimoku Kinko Hyo Page 8

d) For Forex markets
e) For Commodities
f) For Major Indexes

5. Market Entry and Exit with Ichimoku Kinko Hyo Page 9

a) Determining Strong Bullish Signal (BUY Signal)
b) Determining Weak Bullish Signal – Trades to avoid
c) Determining Strong Bearish Signal (SELL Signal)
d) Determining Weak Bearish Signal – Trades to avoid
e) Planning your BUY exits
f) Planning your SELL exits
g) Re-entering BUY – Determining Continuous Bullish Signal
h) Re-entering SELL - Determining Continuous Bearish Signal

6. Practical Exercises. Page 13

7. Credits & References. Page 14
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1. About Ichimoku Kinko Hyo

a) History of Ichimoku Kinko Hyo
Ichimoku Kinko Hyo was founded by Goichi Hosada in 1968. It is created to recognize Major
Trend, analyze Support and Resistance of a market and to detect Market Reversal. It was also
used in charting to improve the accuracy of forecasted price.

b) Key Elements of Ichimoku Charts

Tenkan-sen
Tenkan-Sen calculation: (highest high + lowest low)/2 for the last 9 periods.
It is primarily used as a signal line and a minor support/resistance line.

Kijun-sen
Kijun-Sen calculation: (highest high + lowest low)/2 for the past 26 periods.
This is a confirmation line, a support/resistance line, and can be used as a trailing stop line.

Senkou Span A
Senkou Span A calculation: (Tenkan-sen + kijun-sen)/2 plotted 26 periods ahead. Also called
leading span 1, this line forms one edge of the kumo, or cloud

Senkou Span B
Senkou Span B calculation: (highest high + lowest low)/2 calculated over the past 52 time
periods and plotted 26 periods ahead.

Also called leading span 2, this line forms the other edge of the kumo.

Chinkou Span
Chinkou Span calculation: today's closing price projected back 26 days on the chart.

Also called the lagging span it is used as a support/resistance aid.

Kumo
Kumo Cloud is the space between Senkou span A and B. The cloud edges identify current and
potential future support and resistance points.
The Kumo cloud changes in shape and height based on price changes. This height represents
volatility as larger price movements form thicker clouds, which creates a stronger support and
resistance. As thinner clouds offer only weak support and resistance, prices can and tend to break
through such thin clouds.
Generally, markets are bullish when Senkou Span A is above Senkou Span B and vice versa
when markets are bearish. Traders often look for Kumo Twists in future clouds, where Senkou
Span A and B exchange positions, a signal of potential trend reversals.

In addition to thickness, the strength of the cloud can also be ascertained by its angle; upwards
for bullish and downwards for bearish. Any clouds behind price are also known as Kumo
Shadows.

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Ichimoku Kinko Hyo Chart Description

c) Function and Characteristic of Ichimoku Kinko Hyo

- Trend-based system: Trade with the trend, don’t trade against the trend

- Works in all Timeframes: M1, M5, M15, M30, H1, H4, Daily, Weekly

- Works with all instrument: Foreign Exchange, Stocks, Commodities, etc.

- Perfect entry, exit, based on Multiple Strategies of Traders; Intraday, Swing.

- Minimize Losses when you are wrong, Maximize Profit when you are right.

- No need of any other indicators, because it is complete and balance.

- Ichimoku Kinko Hyo; “Equilibrium at a Glance”

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2. Why Ichimoku?
a) Complete system – Trend, Momentum and volatility
There are 3 major and important indicators to look at, before deciding a trade.
- Trend; Traders used Moving averages, MACD to look at a trend
- Momentum; Relative Strenght Index (RSI) is used to monitor price momentum
- Volatility; Bollinger Band, etc is used detect volatility of Price

With Ichimoku, it completes your setup of indicators.

b) Perfect Entry and Exit

Entry is made based on Trend. By looking at higher timeframes, we can determine the main trend
of a certain chosen periods.

Whenever trend is determined, traders must look for perfect entry. Good entries tends to give less
heat and results in huge and massive profits for traders.

c) No need of other system or website signaling services

With Ichimoku, traders, beginner or professional need no other services on signaling trades that
results in losses than profit. Traders saves more money and time by avoiding subscribing to
signal services and wasting time looking for trade forums by newbies and act-like-a-pro traders,
giving false and stupid unreasonable analysis.

d) Learn how to predict the Market – Strong Market, Weak Market and Flat
Learn how to forecast market movement and plan your trades. Then, trade your plan with
Ichimoku Kinko Hyo

e) Becoming a more professional Trader

By mastering the Art of Trading with Ichimoku Kinko Hyo, traders can become more
professional and smart in their trading career and profession.

A professional trader makes fewer mistakes and makes more money than anyone else in the
investment market.

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3. Setting up Ichimoku Kinko Hyo Charts

a) Setting Parameters – Default parameters of 9, 26, 52

You may start by setting up your charts with Ichimoku indicator. Open a blank chart with the pair
of your choice and click CTRL N, you can see your MT4 Navigator window appear on your left.
Expand Indicators, and click Ichimoku Kinko Hyo. Drag Ichimoku to your chart and set up the
parameters. By default, it is 9 for TS, 26 for KS and 52 for Senkou Span, or Kumo Clouds.

Some traders modify the settings, based on their money management. For example 27, 78, 156
which can be used on lower timeframes such as M5 and M15. Other prefer the default settings of
9, 26, 52
To make the “Glance” of the Ichimoku chart easier and more contrast, you can setup the colours
as shown below.

Choose line 2 or 3 to thickens the Tenkan Sen, Kijun Sen and Chinkou span. You can also
change the colour based on my settings above. For the Kumo, change the line width to size 5, to
make the kumo clouds more “Cloudy”.

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b) Creating Templates
After you had placed the Ichimoku indicator, you can enhance the looks of the chart by pressing
F8 on your keyboard. The properties window for the charts will appear.

Click the Color Scheme drop down list for Black On White (Recommended). Then, click the
following;
- Chart Shift (On the Chart Toolbar)
- CTRL G (To remove grid lines, if you prefer to)
- CTRL Y (to show period separators)
- Then Click the Templates toolbar and Click “Save Templates”. Save it as Ichimoku Plain or
Ichimoku White, or whatever name you can understand later. It is advisable to place a
number, such as “1. Ichimoku Plain” as the name of the templates for easier access when
applying on another plain charts.

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c) Creating Profiles
After successfully creating your first Ichimoku templates, you can open additional charts for
monitoring smaller timeframes movement. Rearrange the charts as you wish, as long as it makes
you trading easier.

You might want to monitor and look for opportunity to trade your favorite instruments, it’s easy.
Click the button at the bottom of the charts, then, click “Save Profile As”.

If you had created charts for Eurusd, and you want to replace the blank default charts on your
indicator, just replace the “EURO”. If you had created charts not on the default list of profiles,
you can simply name your new profile, say Aussie Dollars, for AUDUSD charts, CRUDE for
Brent Oil, etc.

By setting up profiles, you already start to become a more professional trader, the first step of
course. Simply click the profile to switch between profiles of your favorites charts or instrument.

Additional function, to easily switch from one profile to another, is to click CTRL F5 to switch to
the next profile, or SHIFT F5 to switch to previous profile.

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4. Market Analyzing with Ichimoku Kinko Hyo

a) For Forex markets, All Currencies, including exotic pair

b) For Commodities Exchange on Agricultural, Equities and Energy products

c) For Major Indices in Stock Market index, Dow Jones, Nasdaq, S & P 500, etc.

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 Ichimoku Kinko Hyo – For Professional Charting System by: Radin Hisyamuddin M. Yassin 9

5. Market Entry and Exit with Ichimoku Kinko Hyo

a) Determining Strong Bullish Signal (BUY Signal)
Strong Bullish/Buying signal is a result of Tenkan Sen crossing Kijun Sen from below, above
Kumo Clouds or both Senkou Span A and B. Detect a Bullish reversal is difficult, but can be
seen on the Senkou Span Twist ahead. From the colour itself, we can forecast that a market is
going up by just looking at the Clouds.

For deciding to BUY a market in a day trading, follow this check lists.
- H1 must show price above Kumo Clouds.
- Both TS and KS must be heading upwards, or better above clouds
- Smaller Timeframes must be; TS cross KS from below, above clouds
- Mid Timeframes shows at least a neutral, both TS and KS is inside Kumo
- Chinkou Span must cross both TS and KS from below
- Chinkou Span must be above price and both TS and KS

b) Determining Weak Bullish Signal – Trades to avoid

Weak Bullish signal is a result of TS crossing KS from below, but BELOW KUMO CLOUDS.

Caution must be made when buying below Kumo clouds. The reason is simple. It is a bearish
movement, and it might just be a pullback before continuing its movement downwards.

Strong Trade Signal in not always available for retail traders because a strong movement occurs
like 2 or 3 times a month for a certain pair.

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 Ichimoku Kinko Hyo – For Professional Charting System by: Radin Hisyamuddin M. Yassin 10

c) Determining Strong Bearish Signal (SELL Signal)

Strong Bearish/Selling signal is a result of Tenkan Sen crossing Kijun Sen from Above, below
Kumo Clouds or both Senkou Span A and B. Detect a Bearish reversal is difficult, but can be
seen on the Senkou Span Twist ahead. From the colour itself, we can forecast that a market is
going downwards by just looking at the Bearish Clouds.

When deciding to SELL a market in a day trading, follow this check lists.
- H1 must show price Below Kumo Clouds.
- Both TS and KS must be heading downwards, or better below clouds
- Smaller Timeframes must be; TS cross KS from below, above clouds
- Mid Timeframes shows at least a neutral, both TS and KS is inside Kumo
- Chinkou Span must cross both TS and KS from above
- Chinkou Span must be below price and both TS and KS

d) Determining Weak Bearish Signal – Trades to avoid

Weak Bearish signal is a result of TS crossing KS from above, but ABOVE KUMO CLOUDS.

Caution must be made when selling above Kumo clouds. The reason is simple. It is a bullish
movement, and it might just be a pullback before continuing its movement upwards. Some also
called it false signal detection.

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e) Planning your BUY exits

By using Ichimoku, you make use of the built Take Profit indication. It’s easy to decide an exit.
It happens when TS crosses back KS, from side or above. Chinkou Span crosses both TS and KS
and below price. That is your BUY exit

f) Planning your SELL exits

Like the BUY exit, Sell exit is when TS crosses KS from side or below. Chinkou Span no longer
is under price, it is finding its way up above price and crosses both TS and KS.

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g) Re-entering BUY – Determining Continuous Bullish Signal

Making a continuous buy is similar to entering a trade in the middle of a trend. Just make sure
you had checked on all the conditions and it usually happens during a pullback from an uptrend
movement.

This is when weak bearish crossover is a sell danger zone, because market tends to retrace,
before continuing its way up.

h) Re-entering SELL - Determining Continuous Bearish Signal

It’s similar to deciding to continue buying, Continuous sell can be made when all Selling
conditions are met. It’s also as a result of a Pullback from a bearish movement.

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8. Practical Exercises

a. What are the elements in Ichimoku Kinko Hyo?

b. What are the default parameters of Ichimoku?

c. Can Ichimoku be used with Stock, Commodities or CFD Charts? Please state a few below.

d. Define a strong buy signal in an Intraday Trading.

e. Define a strong sell signal in an Intraday Trading.

f. When does a weak buying/bullish signal occurs? What conditions defines the “False” Buy Signal?

g. When does a weak selling/bearish signal occurs? What conditions defines the “False” Sell Signal?

h. When do we exits or closed our buy positions? Any other alternatives to look at the exits?

i. What condition does we exits or closed our sell positions? Any other alternatives to look at the exits?

j. What conditions do we continue buying in a strong uptrend Rally?

k. What conditions do we continue selling in a strong downtrend Rally?

l. In what way would you practice to master the art of trading with Ichimoku? Please explain in not
more than 100 words.

Notes:

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9. Credits & References.

www.positive-fx.co.uk - Training and trading centres. Brokerage Firm

sfxt.blogspot.com
www.ichi360.com
www.forexfactory.com
www.wikipedia.com
www.fxp-kl.com
- Forex, stocks, Commdities and Energy Analysis
- Creator of the ichi360 trading system
- Search Ichimoku Forever Thread for links
- Source of informations on Ichimoku
- Preferred broker with No trading Restrictions

Disclaimer: Trading foreign exchange on margin carries high potential rewards but also high potential
risks that may not be suitable for all investors. Before deciding to trade foreign exchange, you should
carefully consider your investment objectives, level of experience and risk appetite. Past performance is not
indicative of future results, which can vary due to market volatility. The possibility exists that you could
sustain a loss of some or all of your initial investment and therefore you should not invest money that you
cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and
seek advice from an independent financial advisor if you have any doubts.

Distribution of this Guide is fully permitted as for the following conditions; No materials or information in
this guide is to be modified, so as to preserve the contents of the Trading System. Any comments or
suggestions, please email to radinfx@gmail.com or syamrock2000@yahoo.com
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