ICHIMOKU TRADING STRATEGY

by
Manjunath .S

Trade Any Instrument, Any TimeFrame

Ichimoku Indicator – Components.
Characteristics of Ichimoku Kinko Hyo

• Trend Based System – Trade with the Trend, not against.

• Works in all Timeframes.

• Built-in Stop and Profit Targets.

• Minimises losses when you are Wrong.

• Maximises Profits when you are Right.

Ichimoku Indicator Explained
The Present
1. Tenkan - Sen ( Conversion Line) = ( 9PH+9PL)/2,

PH – Period High, PL-Period Low.

2. Kijun Sen ( Base Line ) = ( 26PH+26PL)/2,

Key Points on Kijun Sen & Tenkan Sen.
1. Both Lines acts as Support & Resistance.
2. Price crossing Tenkan sen is 1st sign of possible reversal.
3. Tenkan Sen crossing above Kijun Sen is Bullish.
4. Tenkan Sen crossing above Kijun Sen is more Bullish, above Kumo (
Cloud) – Strong BUY Signal.
5. Tenkan Sen crossing below Kijun Sen is Bearish.
6. Tenkan Sen crossing below Kijun Sen is more Bearish, below Kumo
(cloud) Strong SELL Signal.
The Future
Kumo ( Senko Span A +Senko Span B)

Senko Span A = ( Kijun Sen +Tenkan Sen)/2 , Plot Value 26 periods in

Future.

Senko Span B = ( 52PH +52PL)/2, Plot Value 26 periods in the Future.

Key Points on Kumo

• Kumo acts as support & Resistance.

• Thick Kumo means – Strong Trend, tough to break.

• Thin Kumo means – Weak Trend, easy to break.

• Price above Kumo – Bullish.

• Price below Kumo – Bearish.

The Past :

• Chikou Span = Closing price of “Current” candle,

Plotted 26 period into the Past.
Key Points on Chikou Span.

• Chikou Span above historical price High – Bullish.

• Chikou Span below historical price Low – Bearish.

Ichimoku Strategies

• 1. Tenkan sen/Kijun Sen cross Strategy.

• 2. Kijun Sen Cross Strategy.

• 3. Kumo Breakout Strategy.

• 4. Ideal Ichimoku Strategy.

Day Trading with Ichimoku.

• Ichimoku Strategy ( Sequence ).

1. Kijun Sen Cross.

2. Wait for Pullback to Kijun Sen or close to Kijun Sen.
3. Set up Entry Trade at exactly at Tenkan Sen.
Strategy in Action – Marked as per Sequence.