HOW TO MAKE MONEY

TRADING THE
ICHIMOKU SYSTEM

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 Introduction
One of the best systems available.
Can be applied to stocks, commodities, futures,
currencies & bonds, crypto-currency
Works very well on all time frames.
Ichimoku chart means ‘one glance equilibrium’ chart.
Once familiar with Ichimoku, it should not take no more
than a glance to decide whether chart is bullish or bearish
or Sideways.
Goichi Hosoda, a Japanese reporter invented this system,
to create an all-in-one indicator to depict market
sentiments.
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 The Important Numbers
Ichimoku system is based on 3 numbers: 9,26 and 52.
In Japan
Not experimenting with numbers and using original
numbers is strongly suggested, as they have stood the
test of time on all time frames and across all asset classes.
No need for other indicators and oscillators.
With its dynamic support/resistance components is well
suited to help the trader in adhering to strict rules.

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 Price Equilibrium
The core of the Ichimoku system is built around the
relationship between price and its equilibrium.
Equilibrium is calculated as the average of the highest
high and the lowest low in three different periods 9, 26 &
52.

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 Ichimoku is a Trend Following System
Successful traders make their money trading trends.
Ichimoku helps in identifying non-trending markets
(MULTIPLE CROSSOVER OF SENKOU A and SENKOU B), so
that it can be avoided.
It has a built-in zone, called the Kumo cloud, which
signifies consolidation.

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 Future Projection and Past Influence
Another built-in feature of Ichimoku is the projection of
future price action.
Current price action has repercussions in the future.
Demand and supply available in the present will create
support and resistance in the future.
System is designed to project dynamic support and
resistance values 26 periods ahead in time.

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 Ichimoku Components
The Ichimoku system has five components to it:
Tenkan
Kijun
Senkou A
Senkou B
Chikou

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 Tenkan
Tenkan also known as ‘the Conversion Line’.
The average of the high and low will give the equilibrium of
price for that period.
Tenkan=(Highest high of 9 periods + Lowest low of 9 periods)/2
Tenkan differs from the 9-period exponential moving average
(EMA) and the 9-period simple moving average (SMA)
Tenkan can work as short term ‘magnetic’ guide for the price.
Price cannot stray too far from the equilibrium that Tenkan
represents.
In uptrend, Tenkan acts as a minor support level and in
downtrend, Tenkan provides minor resistance.

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 Kijun
The Kijun, also called the ‘Base Line’ is primarily a trend
container
Kijun=(Highest high of 26 periods + Lowest low of 26
periods)/2
Traders should not compare Kijun to regular 26-period
simple moving average or exponential moving average.
STOPLOSS

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 Chikou
It is the current price shifted back 26 periods.
If Chikou is above the price of 26 days ago , then the
chart is bullish.
If Chikou is below the price of 26 days ago, it is
considered bearish.
The idea is that the price level from 26 days ago will
either act as resistance, or support.

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 Kumo
The Kumo is the heart of the Ichimoku system and is commonly referred to as
the cloud.
Senkou A=(Tenkan + Kijun)/2
Senkou B=(Highest high of prior 52 periods + Lowest low of prior 52 periods)/2
If Senkou A is above Senkou B, it is considered bullish – GREEN CLOUD
If Senkou A is below Senkou B, it is considered bearish – RED CLOUD
If Cloud/ Flux becomes Thin then Probability of Cloud Breaking, becomes High
– AVOID TRADING IN THIS CASE
If Cloud is THICK then it will give More SUPPORT and RESISTANCE.
If there are too many Crossover of SENKOU A and SENKOU B then avoid
Trading. – CHOPPY MARKET
If Price is inside Cloud in Daily Time Frame then Avoid Trading – Phase of
Consolidation
(Trade only Intraday)

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 STRATEGY
1. TENKAN/KIJUN CROSS
2.CHIKOU FREE
3. PRICE CROSS KIJUN
4. KUMO BREAK (Price will go Above
or Below Cloud)
5. KUMO TWIST( crossover of Senkou
A and Senkou B)
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