ICHIMOKU KINKO HYO PART 1

(ADVANCED)

CONTENT

1. HISTORY of ICHIMOKU 9, 26 52.

2. ICHIMOKU COMPOSED of 5 LINES.
3. ADVANTAGE of ICHIMOKU KINKO HYO.
4. ICHIMOKU CONCEPT.
5. ICHIMOKU CHARACTERISTICS.
6. ICHIMOKU SENTIMENTS.
7. FUTURE SENTIMENTS
8. MULTIPLE TIME FRAMES
9. TREND FOLLOWING INDICATORS
10.OSCILLATORS
11.TRADER’S DELIMA
12.DYNAMICS of MARKET TRENDS
13.SIGNALS
14.KUMO TWIST
15.KUMO SUPPORT and RESISTANCE (4 LAYER of SUPPORT and RESISTANCE)
16.KUMO BREAKOUT
17.KUMO FLOOR
18.KUMO CEILING
19.KUMO SHADOWS
20.DISTANCE BETWEEN PRICE and KUMO
21.HOW ICHIMOKU RELATED TO ELLIOT WAVE THEORY, FIBONACCI, GANN,
CHART PATTERN ETC.
22.APPLICATION of ICHIMOKU KINKO HYO
23.ADDITIONAL CRETERIA TO SUPPORT TRADE WITH ICHIMOKU
24.RECAP
1. HISTORY of ICHIMOKU 9, 26 52.
a. Indicator CREATE before WWII
i. Japanese Financial markets were open for trading on Saturday
ii. Trading week was 6 days LONG
b. 9 Represents a week and half of TRADING
c. 26 Represents the number of trading day in a TYPICAL MONTH
(30 days minus Four Sunday)

d. 52 Represents two month of TRADING

2. ICHIMOKU COMPOSED of 5 LINES.

a. Tenkan Sen (Turning/Conversion line)
b. Kijun Sen (Base/Standard line)
c. Senkou Span A (Leading Span 1)
d. Senkou Span B (Leading Span 2)
e. Chikou Span (Lagging Span)
f. Kumo (Cloud) area in between Senkou Span A and Senkou Span B
2. ADVANTAGE of ICHIMOKU KINKO HYO.
a. Works on all TIME FRAMES
b. Works with all INSTRUMENTS
c. Visual based TECHNICAL SYSTEM
d. Based on PURE price action so it will continue to work in the FUTURE
e. Various STRATEGIES to FIT trader’s REQUIREMENTS/PROFILES
f. INDENTIFY the ENTIMENTS in 1 sec.
g. “FORECASTING” ENTER before the MOVES happen
h. VOLAYILITY build into the SYSTEM
i. No OTHER indicator is NEEDED. It is NOT a “LAGGING” indicator
4. ICHIMOKU CONCEPT.
a. Technical analysis
b. Price Action RELATIVE to EQUILIBRIUM
c. Can be implemented ALONGSIDE other INDICATORS
d. Multi-asset
e. Multi time frame
 f. Trend following
g. “At a GLANCE”
5. ICHIMOKU CHARACTERISTICS.
a. Trend Based System – Go with the trend and NOT against IT.
b. Minimize Losses when you are wrong. MAXIMIZE PROFIT when you are
RIGHT
c. Works in all TIME FRAME
d. Works in all INSTRUMENTS (i.e: Futures, Stocks, Bonds, Forex etc)
e. Built in STOP and Profit TARGET
f. There are MULTIPLE strategies to FIT the PERSONALITY of traders
g. Use the STRATEGY that WORKS for you.
h. “Equilibrium Chart at a GLANCE”
6. ICHIMOKU SENTIMENTS.
a. Bullish Signs
i. Tenkan Sen is ABOVE Kijun Sen
ii. Chikou Span is ABOVE price
iii. Price is ABOVE Kumo (Cloud)
iv. Senkou Span A ABOVE Senkou Span B
b. Bearish Signs
i. Tenkan Sen is BELOW Kijun Sen
ii. Chikou Span is BELOW Price
iii. Price BELOW Kumo (Cloud)
iii. Senkou Span A BELOW Senkou Span B

c. STRENGHT determined by:-

i.Price Action RELATIVE to Cloud

ii. Chikou Span RELATIVE to Cloud

iii.Cross Over RELATIVE to Cloud

7. FUTURE SENTIMENTS
a. General future trend
i. Bullish (Span A above Span B)
ii. Bearish (Span A below Span B)
iii. Strong Support/Resistance (Thick Cloud)
iv. Weak Support/Resistance (Thin Cloud)
b. Look ahead to see WHEN, and at WHAT price it GETS very thin.
8. MULTIPLE TIME FRAMES
a. Seek CONFLUENCE across time frames for INCREASE probability
b. Some BELIEVE that LARGER time frames will DOMINATE SMALLER
ones
c. While other ARGUE that SMALLER time frames HARMONIZE and will
OVERCOME LARGER time frames.
d. This is the RICH FIELD of EXPLORATION.
e. The only thing that we have CONCLUDED is ALIGNMENT between time
frames TEND to ENHANCE the POTENTIAL
9. TREND FOLLOWING INDICATORS
a. Ichimoku Kinko Hyo is a TREND FOLLOWING indicator
i. In Non trend trading, Trading RANGE MARKETS, the application
usage and interpretation of trend following indicators have little or
NO VALUE
iv. In TRENDING markets, almost any TYPE of TREND FOLLOWING
System is EFFECTIVE in IDENTIFYING a BREAKTHROUGH.

iii. Whipsaw
10. OSCILLATORS
a. Trading RANGE- effective in INDENTIFYING POTEN TIAL PEAK and
TROUGH reversal area.

11. TRADER’S DILEMMA

a. The dilemma of trader faces is correctly DISTINGUISHING between a
TRADING RANGE and TRENDING MARKETS
12. DYNAMICS of MARKET TRENDS
a. 75% - 80% of the time locked in trading RANGE
b. 20% - 25% of the time Markets may TREND
c. When MARKETS trend, they TYPICALLY trend higher 2/3 of the time
and LOWER 1/3 of the Time.
d. BUYING is often a cumulative process, reinforced by positive news,
Developments and expectations
e. SELLING is generally a SINGLE decision made when a trader DISLIKES
A MARKET.
13. KUMO TWIST
a. Kumo Twist
i. When Senkou Span A and Senkou Span B exchange positions
ii. Potentials TREND REVERSAL
14. KUMO SUPPORT and RESISTANCE (4 LAYER of SUPPORT and
RESISTANCE)
15. KUMO BREAKOUT
a. Breakout Qualifiers
i. Why Such STRANGE RULES
> If one considers the PSYCOLOGY behind the BREAKS one can see
That a critical COMPONENT of SUCCESSFUL BREAKS is SURPRISE.
 A market that CASCADES into a BREAKDOWN will FREQUENTLY
RECOVER back through the BREAK AREA due to an EXHAUSTION of
SELLERS. The up close prior to the breakdown, however produces
a FALSE sense of SECURITY among HOLDERS of Securities.

b. Kumo Break

i. Traders commonly LOOK to ENTER LONG positions when PRICE

 breaks ABOVE the CLOUD (SUPPORT).

ii. Traders commonly LOOK to ENTER SHORT positions when PRICE

braeks BELOW the CLOUD (RESISTANCE).

iii. CONFIRMATIONS from other ICHIMOKU components (i.e: PRICE

CROSS through Chikou Span, Tenkan sen CROSSOVER Kijun Sen,

Senkou Span A CROSS through Senkou Span B)

16. KUMO FLOOR

a. Senkou Span B is the 52 period EQUILIBRIUM

i. Flat HORIZONTAL periods are COMMON

b. Kumo Floors

i. Flat Cloud BELOW price

ii. Significant SUPPORT

iii. STRONG bearish MOVES expected if KUMO FLOOR are

BROKEN
17. KUMO CEILING

a. Senkou Span B is the 52 period EQUILIBRIUM

i. Flat HORIZONTAL periods are COMMON

b. Kumo Floors

i. Flat Cloud ABOVE price

ii. Significant RESISTANCE

iii. STRONG Bullish MOVES expected if KUMO FLOOR are

BROKEN