Trading ICHIMUKU...!

[santoshdts]

Linkon7= Goldmine of TJ

Regards

Santosh

 

[sanjosedesi]

Hi Linkon, great read. This question is about software. I am having trouble with ichimoku.
A) My preference was MT4, but the data broker I used crashed in 3rd month of my service. If someone knows reliable MT4 data brokers, let me know.
B) I now have MetaStock data from viratech ... data quality and reliability is much much better. However, it does not draw ichimoku well. The cloud stops at current day and does not project in the future. Is there a script to enable / code that?
C) I think you are using Amibroker? Are there any good data providers for that? The other problem I saw with MT4 data was that it was not adjusted for splits, so pretty much useless for 10-20% of the stocks.

Basically, the question can be summarized as ... what is the best tool and data feed if your prime objective is ichimoku settings? ... and is there a way to customize MetaStock to fix ichimoku?

 

[sanjosedesi]

But, personally i prefer using the 5,20,40 settings as we have 5 trading days in a week, 20 trading days in a month and bi-monthly has 40 trading days.

#1. Have you compared the performance under standard and the revised settings?

#2. We also hear that ichimoku can be used at any time interval ... daily, hourly, minutes. If that is true, why should this historical baggage of 20 or 26 trading days matter? Changing setting from 26 to 20 might work on daily, but will it not impact the hourlies?

 

[sanjosedesi]

But, personally i prefer using the 5,20,40 settings as we have 5 trading days in a week, 20 trading days in a month and bi-monthly has 40 trading days.

Another question on the settings. I wonder if a bi-monthly setting of 63 will give better results. I have seen price changes and volatility linked to results. A quarter has 13 weeks giving 65 days, but reduce 2 for holidays which invariably occur, we get 63. I have not tried it because this number is intuition, I still have hard time conceptualizing why any number would work ... but that's a different issue.

 

[sanjosedesi]

The 50% retracement from the top, is basically the mid point of this 2 lines, which happens to be our KS.

Linkon, I know you are not looking for a cheer squad, but ... such clarity in terms of what these indicator sub-components mean is what I was lacking !! Great going.

 

[linkon7]

One reason i never liked metastock is that it uses separate data base for intra data data and EOD data. Plus learning to code in amibroker was easier...!

GLobal Data feed is the best data feed i seen for amibroker. They also feed metastock, so you can give it a trial (they provide 7 days trial). The data is direct feed from NSE's server so we can watch the quote first on our software and then watch the same quote on our terminal a second later.

The settings is individual choice. To me it doesnt matter much, as all it give me is an overall picture.

TS crossing KS is a signal that equilibrium is shifting. Its not a signal for me to act. All i know is the momentum is shifting.

If price is below the cloud, it just means that current players of the market feel the value of the price is not justified. Market is auctioning lower to search for buyers.

Price above KS means price is still above its 50% retracement from the HIGH of the last 26 bars. Ideally, a strong trend should see a 38% retracement, so if trend is strong, price will find buyers before it hits KS. If price does hit KS, it means, order flow is mixed and price is now midway of the progress it made in the last 26 weeks.

The part of the cloud that is projected in the future doesn't affect my trading decision at all. Reason is simple.

CLoud is made up of :
1. SENKOU SPAN A ("1st leading line")

(TENKAN SEN + KIJUN SEN)/2 time-shifted forwards (into the future) 26 periods

2. SENKOU SPAN B ("2nd leading line")

(HIGHEST HIGH + LOWEST LOW)/2 for the past 52 periods time-shifted forwards (into the future) 26 periods

Say I am watching the cloud on EOD data on 31st December' 2011. So my cloud ( or major supply / demand zone) will have 2 value,

SPAN A will be (value of TS on 30th June + value of KS on 30th June'11 ) / 2

SPAN B will be (Highest HIGH for the period 1st July'2010 to 30th June'11 + Lowest LOW of 1st July 2010 to 30th June) / 2

In essence,
PRICE now is CS
50% retracement from the HIGH of one and a half week is TS
50% retracement from HIGH of 26 weeks is KS

and
period before last 26 weeks is the CLOUD...!

Hence multi timeframe.

 

[adityasaraf007]

4. We cannot attempt a long or short trade without a valid stoploss or reference point. i.e. We need a confirmed higher low for a long trade and a lower high for a short trade.

If price has broken the lowest point of the range, then there is no provision for a counter trend long trade as, as a rule, we need a valid reference level to attempt a trade. when the lowest point of the range got broken, we cannot draw a trend line.

If a lowest point is intact and the reference level is broken, then we have to interpret it as a weakness on the buyers of the market and price had to auction lower to search for fresh buyers.

What are you referring as a Lowest Point and the reference level.... I am not sure if I understood it clearly.....

 

[linkon7]

What are you referring as a Lowest Point and the reference level.... I am not sure if I understood it clearly.....

the green horizontal line is the lowest point and a trend line is drawn from that point connecting the nearest pivot low. That pivot low is our reference lvl for long trades. Price should not close below that ref lvl for any further upside....!

 

[adityasaraf007]

Here's the 15min Chart of Minifty with Ichimoku Settings of 4,25,50 representing Hourly, Daily and 2-Days TF:

1. Green Dotted Lines are plotted to mark the Highest and Lowest points of the range; ie; around 5240 and 4850 respectively....

2. & 3. DarkPink Dotted Lines connect the Pivots on Chikou Span (CS plotted in Color Aqua)..... The reference level for Shorts is around 5079 and that for Longs is around 4863.....

4. These represent the valid Stops for the trade and hence we may look forward to a trade on either side....

5. The present angle of the trendlines show that Bears are aggressive than Bulls....

6. Now we plot the Horizontal Support/Resistance lines marked as Red Dotted Lines around 5005-5010 region and 5145-5150 region.....

7. & 8. Now we have a look at Tenkan Sen (TS plotted in Color Yellow) and Kijun Sen (KS plotted in Color Red).... Neither of them is flat representing that price is continuously making new Highs/Lows...

9. Recently TS has crossed above KS from below indicating a rise in Bullish Sentiments among Market Participants....


Conclusion 1: We also note that CS has taken out the recent Pivot High after forming a Pivot Low.... and the fact that TS-KS Combo has given a Bullish Crossover, we may look forward to go Long with Stops at our Reference Level aka recent Pivot Low around 4863.... If the Trade moves in our favour, then the areas of alert are the Top of Cloud (presently around 4980) and the two Dotted Red Horizontal Lines....

Conclusion 2: Or else, we may wait for the DownSloping Trendline to get broken and then take the trade on the Long Side....


Note: Linkon Sir.... does it look good


Regards

 

[sramrutia]

its highly informative system. pl make afl with buy and sell aerrow to follow the system for beginers also. thanks for the sharing of knowledge.