‘Toshimoku’s Trading Tips & Tricks
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If you want to invest in or trade cryptocurrenciesa powerful predictive tool that has been overlooked is Ichimoku Kinko Hyo. I loved learning about the techniques; particularly Fibonacci sequences and Ichimoku. But the most important and reliable method I learned was Ichimoku Kinko Hyo. In the end it didn't work out for me on various levels, so I left. The Ichimoku Kinko Hyo method originates from Japan and has been under-utilised by professionals in the West due to the lack of translation and guidance on how to actually use it, with most dimissing it as an exotic indicator.
It is only in the past decade or ichimoku strategy bitcoin price that Westerners have started to understand the power of Ichimoku Kinko Hyo. This indicator works very well for BTC-USD and other cryptocurrencies, as well as working successfully for Asian traders trading in stocks, commodities and futures. Ichimoku Kinko Hyo translates into English as ' equilbrium chart at a glance ' You can take a quick glance at the chart and immediately find the balance pointor 'equilibrium zone' for the asset in question.
Invented by Goichi Hosodaa journalist, he released the Ichimoku system to the public in after he recruited a group of students to run simulations by ichimoku strategy bitcoin price to test the system for two decades. The Ichimoku system allows you to identify breakouts and jump on an ongoing trend. Moreover, it can give signals to enter trades and allows you to gauge momentum. While the indicator is made up of four componentsthey all must be assessed relative to the market price to understand what is going on in the market.
Use ichimoku strategy bitcoin price components jointly to form an integrated whole picture of price action that can be realised ichimoku strategy bitcoin price just ichimoku strategy bitcoin price glance. At first, using this indicator can be daunting but after a while it becomes very easy to use. You will then have an almost instant understanding of the strength of the current trend and momentum. When using the Ichimoku Kinko Hyothink in terms of equilibrium and disequilibrium.
Since the market is a composite of all individual, human traders, the market is a reflection of group behaviour. Just as you cannot stay happy or angry forever, we must return to the meanso does the market.
The first component that will be detailed is the Ichimoku cloud or ' Ichimoku strategy bitcoin price ' which represents the equilibrium zone over time. If the price is inside the Kumo then we can say the market is in equilibrium. Therefore, when the price is within the Kumo we should look for a breakout of this equilibrium as this will give an early entry into the most likely future direction. Examination of the Kumo will also allow you to realise two things ; the overall trend and the price's relationship to that trend.
Moreover, it provides a multi-dimensional view of support and resistance. This is an improvement over the simplified, linear view of traditional support and resistances at certain level. Instead, in reality the dynamics of the market causes support or resistance zones to expand and contract.
If the price is within the Kumo, the market is trendless. If the price is above the Kumothen we have an uptrend whereas if the price is below the Kumo we have a downward trend. This gives a bullish signal and we could have entered into a buy position once there was a 4-hour close above the Kumo.
However, a smarter strategy is to wait for the market to test the support zone provided by the Kumo. Generaly, if the price is above the Kumo, then the Kumo will provide a zone of support. On the other hand, if ichimoku strategy bitcoin price price is below the Kumo, then it will be a resistance zone. After breaking above the Kumo, the chart below shows that the market pushed down into the Ichimoku cloud.
However, this is the time to buy as the relationship between the price and Kumo is signalling an uptrend and the Kumo currently providing support. Buy positions would then be suggested. So we have looked at the signals the Kumo gives for identifying the start of a trend but it also gives a multi-dimensional view of support and resistance, as mentioned earlier. For example, consider the chart below. As you can see below, the depth of the Ichimoku cloud varies widely over the course of around two weeks.
The depth is an indication of market volatility and hence the extent of support or resistance that will be found in this zone. The thicker the Kumo, the greater support or resistance it will provide.
Ichimoku strategy bitcoin price thinner the Kumo, the weaker the support or resistance will be. Ths can be seen below where a thin Ichimoku cloud was easily broken by the market.
Therefore, we are more likely to see the price change its realtionship with the Kumo when the Kumo is relatively thin. Moreover, clues about the current and future trends are provided by the change in the colour of the Ichimoku cloud.
When the Tenkan Sen is flat, it indicates a trendless condition in the market over the past 9 periods. Ichimoku strategy bitcoin price it is not flat, the angle indicates the relative momentum of the price action over the previous 9 periods.
If the price is above the Tenkan Sen it will act as support. Conversely, the Tenkan Sen provides resistance when the price trades below it. But given the short-term nature of this component, it is not as reliable as the other signals in the system. Nevertheless, the price crossing over the Tenkan Sen is usually a good indicator of a shift in momentum. For example, if the price action breaks above the Tenkan Sen this signals a shift to upward momentum.
Whereas if the price moves from above to below the 'base' line this indicates a higher likelihood of downard momentum over the short-term. However, as with all Ichimoku signals, this should be evaluated against the other three components.
The third component is the Kijun Sen or ' conversion ' line which is the highest high and lowest low averaged over the previous 26 periods. Two main signals are given by the conversion line This is illustrated in the chart below which shows that the conversion blue line gives a tighter level of support and resistance and a more accurate depiction of price equilibrium.
Also, notice that when the conversion line is flat, the price action is attracted to it and we experince the 'rubber band' effect. The price rotates around this equilibrium level swinging away then back towards the Kijun Sen. Another ichimoku strategy bitcoin price is the crossover between the Tenkan Sen and Kijun Sen. The chart below displays how to use this strategy. The Chikou span or 'lagging' line ichimoku strategy bitcoin price the current price time-shifted back 26 periods.
The main signal given is trend confirmation. The arrow highlights that the lagging line is moving above the Kumoproviding a buy signal. This confirms the bullish Kumo breakout and strongly confirms an upward trend is underway.
Therefore, we use the lagging line to find a support level, indicated ichimoku strategy bitcoin price the chart with the yellow ray. After testing this support, we see that the upward trend continues. To exit this trade, we ichimoku strategy bitcoin price also use the lagging line to ichimoku strategy bitcoin price a resistance area where the upward trend ichimoku strategy bitcoin price exhaust itself.
To do this, we zoom back and find the most recent peaks or troughs in case of a downtrend and set our take ichimoku strategy bitcoin price levels accordingly. This is illustrated below. The Chikou span is unconventional in that it time-shifts the current price to compare with the historical price action. If the Chikou span is above the previous price action, then this is bullish. Whereas if the Chikou span is below the previous price action then this points to more bearish action to come.
Use all of the components together to form an integrated picture. Also, at this point the Chikou span is ichimoku strategy bitcoin price above the previous price. Therefore, the integrated picture points to an upward trend, so we should wait for the market to find support before buying.
Longer timeframes are betterproviding more reliable signals such as the weekly, daily and 4-hour. Shorter timeframes generate too much noise and provide less reliability and more opportunities for fake signals. This method is based on probabilities and back-testing can give you a better indication of the risk you are taking when acting on various signals I personally like to wait for confirmation and execute lower risk, lower reward trades.
Also, you can combine this indicator with volume to generate a richer outlook. One disadvatnge is that the Ichimoku system can be hard to get your head around ichimoku strategy bitcoin price first and takes some practise. Also, a further disadvatnage is that it does not explicitly state where to put a stop loss so you have to also find out how much risk you are willing to take ichimoku strategy bitcoin price whether or not that risk is justified.
It will allow you to get a better entry when you ichimoku strategy bitcoin price to buy Bitcoin, Steem or other crypto's and even allow you to switch between coins to take advantage of appreciation or depreciation. This is exactly what I was looking for. What timeframe would be suitable to look at for beginners. Also which timespan for the candles do you recommend?
Do you have any preferred platform for trading and charts? Is it possible to set up automatisms or are there platforms that can at least give an audio note if there is a certain pattern visible? It would be interesting to hook it up with a few lines of bot code and see how well code can trade hehe: I suggest taking the daily timeframe at first, it is slower and day by day you will become accustomed to the Ichimoku signals and how well they perform.
There are automated trading techniques with this indicator but not too familiar with the coding I would suggests to take a discretionary instead of mechanical approach as you need to consider all of the components together for best results Thanks for ichimoku strategy bitcoin price reply!
Okay will definitely check it out. Most of my previous trading was based on plain gut feeling that can easily work out as well. But I always felt a bit bad about not understand much about the common trading practices and signals. Are you planning on more information about those in your future posts? The next one will be the fractal method.
Thank you so much!