Foxtail, it is my pleasure. I am always comfortable talking about my methodology. I use the default settings, 9/26/52 as they have proven to be the best. It is arguable that 9/28/56 work better, because 28 represents in most markets the circa number of candles that is necessary for a complete cycle within a trend.
There are many variables in using and interpreting the cloud formation. Most of the time when the cloud has been hit the first time, it will contain, and there will be a reversal.
The drop, as an example, was very predictable for the GBP/AUD, because it hit the bottom of the daily cloud, and looking into the future, it was very bearish. A very strong move south is also very predictable for the EUR/CAD, because it hit the top of the daily cloud, and it is bearish into the future. Once you are on the other side of the cloud, then there is a very strong possibility [rice will continue in that same direction, particularly if the tenken has crossed the kijun, and they are trailing close by. It was in my blog that I predicted the strong imminent reversal for the EUR/USD, because the hourly tenken and kijun were resting securely on top of the cloud. That is heavy confluence of support.
When price gets to flying too very high above the cloud or very low under the cloud, it is warning of a reversal. It will not continue forever. Picture it as a plane that has risen too high above the cloud. It has to come down at least to the top of the cloud.
The other thing you want to pay attention to is the chinkou. If it has crossed the candles, that is a strong indication the trend will continue.
There are many that use the ichimoku as a standalone, because it is really 5 indicators in one, thus one look (ichimoku). I'm not that way. I use my proprietary set of S&R's, the stochastics that I use mainly as a momentum indicator, and TL's. If a market has been wrestling with the idea of breaking through the cloud, and the stochastics is indicating strong momentum, and there was an hourly close on the other side of my weekly S or R, then that is a strong indication we would get a break into the cloud. If it is a thin cloud, then it could break through the other side. If it is a strong move, then there will probably be a retracement back to the cloud, as it will act as support.
I don't know what the problem is in bring up my charts. They are posted on my blog, but I am not allowed to post it in an open forum, and I understand the moderators' reasons for that.
You do have the right idea in using a straight rigid line as containment S or R.If price seeks too far below that line, or rises to high above it, then you can expect a gravitational pull back to it, as it represents market equilibrium.
Another thing I do is watch the different time frames. If I am expecting a pullback on the daily, but the weekly is indicating the opposite, then ichimoku is saying, "Be careful." Take your position, but don't be too comfortable. I had a short on the EUR/USD because of what I was seeing on the 4-hour and daily charts, but the weekly was saying we are still headed up. I jumped out of the short for about 110 pips, and then reversed direction on it, and it all worked out. Oh yeah, LOL, I reversed direction again, so you might need a road map to keep up. I hope that clears it up a little. Feel free to comment more. You'd be surprised. By talking about the methodology, I benefit too, because it helps in further ensconcing the principles. I'm a very confident trader, but still humbled at what there is to learn. My desire is always, that the benefit is mutual.
There are many variables in using and interpreting the cloud formation. Most of the time when the cloud has been hit the first time, it will contain, and there will be a reversal.
The drop, as an example, was very predictable for the GBP/AUD, because it hit the bottom of the daily cloud, and looking into the future, it was very bearish. A very strong move south is also very predictable for the EUR/CAD, because it hit the top of the daily cloud, and it is bearish into the future. Once you are on the other side of the cloud, then there is a very strong possibility [rice will continue in that same direction, particularly if the tenken has crossed the kijun, and they are trailing close by. It was in my blog that I predicted the strong imminent reversal for the EUR/USD, because the hourly tenken and kijun were resting securely on top of the cloud. That is heavy confluence of support.
When price gets to flying too very high above the cloud or very low under the cloud, it is warning of a reversal. It will not continue forever. Picture it as a plane that has risen too high above the cloud. It has to come down at least to the top of the cloud.
The other thing you want to pay attention to is the chinkou. If it has crossed the candles, that is a strong indication the trend will continue.
There are many that use the ichimoku as a standalone, because it is really 5 indicators in one, thus one look (ichimoku). I'm not that way. I use my proprietary set of S&R's, the stochastics that I use mainly as a momentum indicator, and TL's. If a market has been wrestling with the idea of breaking through the cloud, and the stochastics is indicating strong momentum, and there was an hourly close on the other side of my weekly S or R, then that is a strong indication we would get a break into the cloud. If it is a thin cloud, then it could break through the other side. If it is a strong move, then there will probably be a retracement back to the cloud, as it will act as support.
I don't know what the problem is in bring up my charts. They are posted on my blog, but I am not allowed to post it in an open forum, and I understand the moderators' reasons for that.
You do have the right idea in using a straight rigid line as containment S or R.If price seeks too far below that line, or rises to high above it, then you can expect a gravitational pull back to it, as it represents market equilibrium.
Another thing I do is watch the different time frames. If I am expecting a pullback on the daily, but the weekly is indicating the opposite, then ichimoku is saying, "Be careful." Take your position, but don't be too comfortable. I had a short on the EUR/USD because of what I was seeing on the 4-hour and daily charts, but the weekly was saying we are still headed up. I jumped out of the short for about 110 pips, and then reversed direction on it, and it all worked out. Oh yeah, LOL, I reversed direction again, so you might need a road map to keep up. I hope that clears it up a little. Feel free to comment more. You'd be surprised. By talking about the methodology, I benefit too, because it helps in further ensconcing the principles. I'm a very confident trader, but still humbled at what there is to learn. My desire is always, that the benefit is mutual.
