Cloud Trading Ichimoku System

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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 toco"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 $-% I"-IO( %$-O' /

)hat is +chimoku Ki"ko 'yo

1tti"g up th charts 1

*A&$ $WO B ASI" "-A&$ A #A01SIS 2)

3si"g +chimoku as a charti"g systm 14

3si"g +chimoku as a tradi"g systm 2

Crati"g your %irst basic +chimoku a"alysis

56ampl a"alyss 7

*A&$ $-&%% *&A"$I"% 3)

56rciss 84

A"swr Ky 9

4I#A0 W O&'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 +chimokusystm& 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: uilibrium or

bala"c& a"d 'yo ma"s: chart. *h trm +chimoku Ki"ko

'yo could b tra"slatd as: B>" gla"c uilibrium chartB&

or BChart bala"c at a gla"cB.




Who created the

Ichimoku inko -yo

system5

+t was dvlopd by a apa"s co"omic ,our"alist& "am

Goichi 'osoda& who aimd to crat a ki"d o% Dall@i"@o"Ei"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 co"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" 17& a"d it rapidly bcam

th most %ru"tly usd i"dicator i" apa"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"dmatrials 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% apa". 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"ytradi"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 uit 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 apa"s systm& th "ko.




What official sources

use Ichimoku regularly

for chart analysis5

ust 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.

. >" th $avigator pa"l o% your ;tatradr choos

+"dicatorsJ +chimoku& a"d add it to you charts.

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 apa"s busi"ss mo"th which




i"cludd aturdays& th "umbr rprs"ts a wk a"d a

hal% a"d th "umbr 92 rprs"ts two mo"ths. om 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% uartr

;oo" cycl& a"d "umbr 92 rprs"ts a doubl ;oo" cycl.

Is it ossible to use

alternative setting

values5

Hs& it is possibl. om 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 (owst (ow/2 %or th past priods.

@ *h i7un6Sen ta"dard li" is calculatd as 'ighst

'igh (owst (ow/2 %or th past 27 priods.@ *h "hikou San (aggi"g pa" is calculatd as curr"t

pric tim@shi%td backwards 27 priods.

@ *h Senkou San A !astr pa" A is calculatd as

*"ka"@" Ki,u"@"/2.

@ *h Senkou San B !astr pa" - is calculatd as

'ighst 'igh (owst (ow/2.




Is it necessary to learn

the 8aanese name of

the elements5

+t is vry importa"t to lar" th 6act apa"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"upractici"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& %or6ampl 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 "kou pa" A a"d "kou pa" - F

%orm th u"iu 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

+% "kou pa" A is abov "kou pa" -& th color o% thKumo is light a"d it i"dicats a possibl bullish tr"d. +% th

"kou pa" A is blow "kou pa" -& th Kumo color is

dark a"d th tr"d is i"dicatd as barish. )h" "kou

pa" A crosss "kou pa" - 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"dasy 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 pa" 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 pa"

Chikou pa" ca" b abov th Kumo bullish tr"d& blow

th Kumo barish tr"d or i" th Kumo "utral&

u"dcidd tr"d. Chikou pa" 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"@" a"d *"ka"@"

'owvr th positio" o% Ki,u"@" a"d *"ka"@" 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 ltBsdo th sam with th othr compo""ts o% +chimoku.

a Chikou pa" vrsus pric

+% th Chikou pa" 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 pa" 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 pa"

is i" th Kumo& th tr"d is u"dcidd& bcaus th "kou

pa" A a"d "kou pa" - support a"d rsista"c li"s ca"

a%%ct to it stro"gly& a"d Chikou pa" ca" bou"c th pric

back v" it has alrady brok" out %rom th body o% th

Cloud.




b Ki,u"@" vrsus pric

*h Ki,u"@" 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"@" ca" b vry

tlli"g too& as i% pric lavs bhi"d Ki,u"@" %ar away& it

usually tur"s %lat a"d attracts back th pric to crat

uilibrium. <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"@" a"d pric was rstord& thy usually mov i" th

dirctio" o% th tr"d agai".




c *"ka"@" vrsus pric

*"ka"@" 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"@" to Ki,u"@"& th" bou"cs i"to th dirctio" o%

th tr"d agai". +% pric movs through *"ka"@" 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 pa" vrsus Ki,u"@"

Chikou pa" ca" b abov bullish sig"& or blow barish

sig" Ki,u"@". As Ki,u"@" is a vry stro"g

support/rsista"c lvl& as lo"g as th Chikou pa" is abov

it th bullish movm"ts ar wll supportd& a"d i% Chikou

pa" is stayi"g blow Ki,u"@"& th dow" movm"ts ar

supportd. +t is vry commo"& that Chikou pa" is bou"ci"g

o" th Ki,u"@" b%or a hug mov happ"s.




*"ka"@" vrsus Ki,u"@"

A *"ka"@"/ Ki,u"@" 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 bothcompo""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"@" a"d Ki,u"@"

2. th Kumo is thick a"d bullish

. th *"ka"@" has crossd up Ki,u"@" abov th

Kumo

8. th Chikou pa" is abov both Kumo& *"ka"@"&

Ki,u"@" a"d pric

*h pictur o% a" idal barish tr"d would b:

1. th pric is blow th Kumo& *"ka"@" a"d Ki,u"@"

2. th Kumo is thick a"d barish

. th *"ka"@" has crossd dow" Ki,u"@" blow th

Kumo

8. th Chikou pa" is blow both Kumo& *"ka"@"&

Ki,u"@" a"d pric




+dal barish tr"d.

$he signs of trend

weakening

gardi"g to th prviously dscribd idal bullish tr"d& th

sig"s o% th tr"d wak"i"g would b:

1. Chikou pa" movs blow Ki,u"@"

2. <ric movs blow *"ka"@"& th" Ki,u"@"

. *"ka"@" crosss dow" Ki,u"@"

8. -oth Chikou pa"& *"ka"@"& Ki,u"@" 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 pa"& a

complt cha"g o% th tr"d %rom bullish to barish ca"

b diag"osd.




gardi"g to th prviously dscribd idal barish tr"d&

th sig"s o% th tr"d wak"i"g would b:

1. Chikou pa" movs abov Ki,u"@"

2. <ric movs abov *"ka"@"& th" Ki,u"@". *"ka"@" crosss up Ki,u"@"

8. -oth Chikou pa"& *"ka"@"& Ki,u"@" 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 pa"& 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.

gardi"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. *h Ki,u"@"

8. *h *"ka"@"




gardi"g to th prviously dscribd idal barish tr"d&

th str"gth ordr o% th support lvls i" dsc"di"g

ordr would b:

1. *h top o% th Kumo2. *h bottom o% th Kumo

. *h Ki,u"@"

8. *h *"ka"@"

(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"ius what ar rcomm"dd %or bgi""rs.




$enkan6Sen:i7un6Sen

cross

tro"g buy sig"al: cross happ"s abov th Kumo

tro"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 pa" co"%irms th mov. +% th pric braksout %rom th Kumo& but th Chikou pa" 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"iu 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 pa". +t

dos"Bt mattr& i% pric has alrady brok" out %rom th




Kumo& i% th Chikou pa" is still thr. +t is vry usual& that

Chikou pa" 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"@

"/Ki,u"@" 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"@" is th

6act valu o% th '8 chartBs Kumo top. +" that cas i% pric

closs blow th #aily Ki,u"@"& 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 thothr sid o% th Kumo. +t %ollows that it is a good ida to put

th sa%ty stop to that lvl a %w pips bu%%r. +t is also a

commo"ly usd tch"iu to put th stop loss to th last

high/low bu%%r& or th last rou"d "umbr lvl 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"ius 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"@"

− 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 pa" is u"dr th Kumo too& put abov th pric&

*"ka"@" is blow Ki,u"@"& 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 ruirm"ts that you should

always chck to b abl to mak a tradi"g dcisio" with

+chimoku:

− th pric vs Kumo

− *"ka"@" vs Ki,u"@"

− Chikou pa" vs Kumo& <ric a"d Ki,u"@"

− Kumo %utur

*hs ar th mi"imum ruirm"ts. Always chck thm i"

this ordr. +% ths paramtrs ar showi"g th sam& you

ca" "tr with a *"ka"@"/Ki,u"@" cross or with a

Kumo brakout. +% you %i"d that %or 6ampl th *"ka"@"

a"d Ki,u"@" 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 ruirm"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"@" crossd Ki,u"@" i"

th opposit dirctio"& do "ot "tr till it starts to supportth 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 ruirm"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"ius& 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". tart %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"gi"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"@"/Ki,u"@" crosss or Kumo brakouts thr.




"-%A$ S-%%$

-igher timeframe 2

<e.g. -3=

− <ric vs Kumo

− *"ka"@" vs Ki,u"@"


−Kumo %utur

-igher timeframe >

<e.g. -2=

− <ric vs Kumo

− *"ka"@" vs Ki,u"@"


− Kumo %utur

%ntry $imeframe

<e.g. 2?=

− <ric vs Kumo

− *"ka"@" vs Ki,u"@"

−Chikou pa" vs Kumo& <ric a"d Ki,u"@"

− Kumo %utur




%@amle analysis 2.

'ighr tim%ram 1. '8

− <ric vs Kumo (*

− *"ka"@" vs Ki,u"@" (*

− Chikou pa" vs Kumo& <ric a"d Ki,u"@" (*

− Kumo %utur (*

-igher timeframe >.

<-2=




− <ric vs Kumo (*

− *"ka"@" vs Ki,u"@" (*


−Kumo %utur (*

%ntry timeframe <2?=

− <ric vs Kumo (*

− *"ka"@" vs Ki,u"@" (*


− Kumo %utur (*

%ntry strategy Kumo brakout a"d/or *"ka"@

"/Ki,u"@" cross

Sto 0oss at th bottom o% th Kumo bu%%r

%@it strategy rou"d "umbr lvl& or pric/Ki,u"@"

cross




%@amle analysis >.

-igher timeframe 2.

<-3=

− <ric vs Kumo 'OW#

− *"ka"@" vs Ki,u"@" 'OW#

− Chikou pa" vs Kumo& <ric a"d Ki,u"@" 'OW#

−

Kumo %utur 'OW#

-igher timeframe >.

<-2=





− *"ka"@" vs Ki,u"@" 'OW#


−Kumo %utur 'OW#



− *"ka"@" vs Ki,u"@" 'OW#


− Kumo %utur 'OW#


"/Ki,u"@" cross

Sto 0oss at th top o% th Kumo bu%%r

%@it strategy rou"d "umbr lvl




%@amle analysis .

-igher timeframe 2.

<-3=

− <ric vs Kumo (*

− *"ka"@" vs Ki,u"@" (*


− Kumo %utur (*

-igher timeframe >.

<-2=




− <ric vs Kumo (*

− *"ka"@" vs Ki,u"@" (*


−Kumo %utur (*


− <ric vs Kumo (*

− *"ka"@" vs Ki,u"@" (*

−Chikou pa" vs Kumo& <ric a"d Ki,u"@" (*

− Kumo %utur (*

%ntry strategy Kumo brakout


%@it strategy pric/Ki,u"@" cross




%@amle analysis 3.

-igher timeframe 2.

<-3=

− <ric vs Kumo (*

− *"ka"@" vs Ki,u"@" (*


− Kumo %utur (*

-igher timeframe >.

<-2=




− <ric vs Kumo (*

− *"ka"@" vs Ki,u"@" (*


− Kumo %utur (*


− <ric vs Kumo (*

− *"ka"@" vs Ki,u"@" (*


−Kumo %utur (*

%ntry strategy Kumo brakout


%@it strategy rou"d "umbr lvl& or pric/Ki,u"@"

cross




%@amle analysis ?.

-igher timeframe 2.

<-3=


− *"ka"@" vs Ki,u"@" 'OW#


− Kumo %utur 'OW#

-igher timeframe >.

<-2=





− *"ka"@" vs Ki,u"@" 'OW#


−Kumo %utur 'OW#



− *"ka"@" vs Ki,u"@" 'OW#


− Kumo %utur 'OW#


"/Ki,u"@" cross


%@it strategy pric/Ki,u"@" 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.

>.

.

3.?.

).




%@erciese >.

Is the trend currently bullish or bearish5

Why5 *lease give at least 3 e@lanations.

$he trend is C........................ because

2.

>.

.

3.




%@erciese .

What are the most imortant resistance levels on

this icture5

ention the most imortant ones in descendingorder.

2.

>.

.




%@erciese 3.

A.= Which strategy did we use when we entered at

the candle marked with the arrow5

Answer

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.

Answer

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 strategy

C.............................................................................

"orrect enty or not

C.............................................................................

Why5

C.............................................................................




%@erciese ).

*rice broke out from the umo with a sectacular

bullish candle. Is it a good idea to enter now5 Why5

Answer

C............................................................................

Why5

C............................................................................




%@erciese /.

Which one is the only good entry5 Why5

Answer

C..............................................................................

Why

C.............................................................................




%@erciese D.

We have entered long after the close of the marked

candle. Where do we have to ut the safety Sto

0oss5

Answer

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

Answer

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 533# #aily tim%ram. *h sco"d

chart shows th "arly whol 2010 yar o" th 3#<H )kly tim%ram.

<las do th %ull dtaild a"alysis o% th 2010 yar rgardi"g

to ths charts. tart %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 uality 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 a"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"@"

2.: Ki,u"@"

.: Chikou pa"8.: "kou pa" A

9.: "kou pa" -

7.: Kumo

%@erciese >.

*h tr"d is -5A+' bcaus:

1. *h pric is blow th Kumo.

2. *"ka"@" is blow Ki,u"@"

. Chikou pa" is blow Kumo& pric a"d Ki,u"@"

8. *h Kumo %utur is barish dark.

%@erciese .

1. *h top o% th Kumo

2. *h bottom o% th Kumo

. *h Ki,u"@"

%@erciese 3.

A. ) usd th *"ka"@"/Ki,u"@" 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 pa" 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 pa" co"%irms th mov.

'r th Chikou pa" was still i"/u"dr th Kumo& a"d look what happ"d latr:

Chikou pa" was bou"cd back by th bottom o% th Kumo

which is a stro"g rsista"c li" as you hav lar"d

prviously. o th mov was o"ly a %akout. *hat is why you

should always co"%irm a Kumo brakout with at last th

Chikou pa".

%@erciese /.

*h $o. 8. is th o"ly good "try& as Chikou pa" co"%irms

th mov a%tr th clos o% that ca"dl.




%@erciese D.

*o th bottom o% th Kumo 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

bu%%r.

%@erciese E.

) should clos th positio" wh" th pric crosss back th

Ki,u"@".




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

Documents

Cloud Trading Ichimoku System