Bhai, please explain in a "for dummies" language. Been a long time since I looked over Ichi, let alone read it. We had a member @4xpipcounter who used it along with trendlines, but has been inactive since years.
General Trading Chat
- Thread starter timepass
- Start date
- Tags idle thoughts trading talk only
This is ichi 4,11 instead of 9, 26. I have read of people using 5, 21 for Indian markets (5 days week, 21 days month). Maybe @Pradeep Narayan uses 4, 11 and it works well for him.
I am not dwelling on the basics of Ichimoku as there are sufficient materials on the internet.
The critical factor in trading success is your 'Hit Rate' and contra to what you may have read, you need a very good hit-rate to become successful.
In order to get a good hit-rate, you need a good signalling system... a system that gives more signals with higher success ratio.
The signalling system I use is Ichimoku with parameters 4,11,22. The reason is that the original developer used a yearly data (weekly data bits spanning 1 year) and hence the default parameters of 9,26,52. My trading system is a based on a monthly window, hence these parameters - there are 22 days in a month.
The signals from Ichimoku are many, but I use Chikou cross over of the moving averages. The Kijun and Tenkan are the 2 moving averages (short and long), rather than act of the cross-over signal immediately, I wait for the lagging price line to cross the moving averages. This way, I am somewhat protected from false-breakouts & whipsaws.
In the chart below, I have knocked off the Kumo and changed the price pattern to a line graph (orange line). I have also increased thickness of all the Ichimoku lines so that the cross-overs are clear. You would notice that in this graph the "Probability of the price continuing in the same direction is much higher after the Chikou span crossing the 2 MA". If you were to take a count of all crosses in the graph below and then check if the price actually followed the direction indicated - you would see that the success rate of this signalling system is pretty OK
In this system that takes trade based on each of these cross overs, you would see that whenever the going is good - it is excellent and whenever the signal is faulty, the exit is also faster!
The rest of the modifications and usage possibilities, I leave it to you!
The critical factor in trading success is your 'Hit Rate' and contra to what you may have read, you need a very good hit-rate to become successful.
In order to get a good hit-rate, you need a good signalling system... a system that gives more signals with higher success ratio.
The signalling system I use is Ichimoku with parameters 4,11,22. The reason is that the original developer used a yearly data (weekly data bits spanning 1 year) and hence the default parameters of 9,26,52. My trading system is a based on a monthly window, hence these parameters - there are 22 days in a month.
The signals from Ichimoku are many, but I use Chikou cross over of the moving averages. The Kijun and Tenkan are the 2 moving averages (short and long), rather than act of the cross-over signal immediately, I wait for the lagging price line to cross the moving averages. This way, I am somewhat protected from false-breakouts & whipsaws.
In the chart below, I have knocked off the Kumo and changed the price pattern to a line graph (orange line). I have also increased thickness of all the Ichimoku lines so that the cross-overs are clear. You would notice that in this graph the "Probability of the price continuing in the same direction is much higher after the Chikou span crossing the 2 MA". If you were to take a count of all crosses in the graph below and then check if the price actually followed the direction indicated - you would see that the success rate of this signalling system is pretty OK
In this system that takes trade based on each of these cross overs, you would see that whenever the going is good - it is excellent and whenever the signal is faulty, the exit is also faster!
The rest of the modifications and usage possibilities, I leave it to you!
Similar threads
-
-
-
What are some general and basic price-volume action pattern one should know?
- Started by shyttrader
- Replies: 1
-
-