Ankitgarg, I agree with your last paragraph-- the first part. We are all learners. I have developed a lot of confidence, and I speak from that based on the principles that I have lived, but that is because the experience has brought on confidence. OTOH, I consider myself to be a lowly student, and paying my dues, as I feel I still have much to learn, as this is another reason I love a thread like this one, because the ichimoku stills astounds me.
A few things about that move look obvious to me. The break of the cloud was included with the equilibrium on the part of the tenken and kijun.
This is the hourly chart, so the next thing to consider before taking a trade on it, is what is the 4-hour doing. If the 4-hour had just made a move south, then corrected to a confluence of the tenken and kijun, that may be a stronger precursor of a move south, rather than north.
In other words, use the lower timeframes, but keep in my mind that you are going to have more noise. Use the higher timeframe as a confluence.
Another thing to look for from current level ( as it pertains to your chart) is that price still has not made it south of the cloud. Many times, what happens is that price will break on the other side of the cloud, then you get a correction back to the top of the cloud, which means the cloud now serves as support. If from current level, you get a move back above the tenken and kijun, then that would be an excellent signal to go north.
Constructively, I was looking at your entry, it appears you took the position as soon as the candle broke out of the cloud. More often than not, we will get spikes out of the cloud. When the candle has finished its formation the body of the candle would still be inside the cloud, while the wick was forced out. In essence, the proper entry is after the candle formation, and even better, after the candle formation and a pull back to the cloud.
Keeping the spikes in mind, setting a stop a few pips under the cloud could mean trouble, because of the proclivity towards spikes. If you have to use the other side of the cloud ass a stop, it is also probably too wide. After all, if price gets close, than means the candle is back in the cloud, which means you are going sideways before you even make it back to breakeven. My stop would have been half way through the cloud. Another favorite way I have of using ichimoku to set a stop is look at the kijun, and count 3 candles back, subtract 1, and that is your stop.
This is also why I said that if price breaks back above the TK confluence, it would make for a good entry. At this point, you are looking at strong momentum heading south, and lots of overhead R.
Another nice thing I like about this thread is that I can view the ichimoku as an object, rather than a trading vehicle. Over in my thread, I don't get into any logistical information concerning the ichimoku. This is because in my thread I use it for strictly forecasting, so the ichimoku becomes an official trading vehicle.
Thank you 4xp for the insight. I have often mentioned before that the quality of content that a poster posts can always tell a lot about genuineness of a trader.
As for the kiwi trade, I am not too sure what went in my mind when I had taken that trade. It certainly was a cliud breakout trade, coupled with TS/KS cross which had already taken place a day in prior. I entered at the close of the candle outside the cloud(taking it as the cloud breakout) and the SL was placed at the other end of the cloud.
I would like to know your view on something here. If you see the pic, before the trade went on to hit the SL, a reverse TS/KS crossover took place, followed by a pullback to KS. This violated at least one of the conditions of the Long set up. However, the cloud breakout was yet to come. And the Chikou was into the price bars.
How do you handle such situations? DO you trade out because of violation of one of the conditions for the trade and cut your losses? Or do you stay in the trade as long as it does not hit the orginal SL?After all the bottom of cloud was supposedly a good Support and trade might have bounced off from there.
Lastly, I myself am just a learner of Ichi. Due to some commitments over the past few months, I was not able to give time to it and now plan to revisit the set ups and take some trades.
In the end, we all are pupils of market and I am glad to find a senior classmate here.
Ankit
