Ichimoku XIII--kumo
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Here's the 5-min for the GBP/CAD. There was some discussion about intraday setups, so I am posting a 5-min chart.
I'll get to my point, but for now notice on this 5-min chart everything looks the same as it does on a 4-hour, daily, or weekly chart. Candles go up and down passes through the cloud, and typical supports and resistances are noticeable. The only difference is the candles represent a different period of time.
This is why I encourage all comments. After the comment, it allows me to expound on it, and hopefully others are able to glean something from it.
I've mentioned many times how the rule is for a candle to pass through one end of the cloud, then at least hit the other side. WE see that happening on the downtrend and even continued moving south, and then in an uptrend, and in that case, movement was contained just on the other side of the cloud.
Why would this be so predictable? In other words how do we know with relative certainty that when a candle enters the cloud at one end, it will at least hit the other end?
Again, we are talking about the mean. One end is an average of the high and low of the last 52 candles. The other end is a simple average of the tenken and kijun, and it is plotted 26 candles in advance of the last measured candle. Inside the cloud represents the ultimate in the markets balance and equilibrium. Once the candle finds it way outside the cloud it has broken loose of the equilibrium. In essence, as traders we are really looking for opportunities that will present itself outside the markets balance. As traders, we don't like equilibrium. Many times we close a trade when the candle hits the top or bottom of the cloud as the candle approaches it from the outside. Once inside the equilibrium zone, namely the cloud, things aren't nearly as predictable nor do they move with the same one way conviction.
As we already studied, price action is predictable when it is in an extreme area relative to the cloud. Another thing that is predictable is, initially, the cloud will act as support or resistance on the initial hit.
jpg image hosting
Here's the 5-min for the GBP/CAD. There was some discussion about intraday setups, so I am posting a 5-min chart.
I'll get to my point, but for now notice on this 5-min chart everything looks the same as it does on a 4-hour, daily, or weekly chart. Candles go up and down passes through the cloud, and typical supports and resistances are noticeable. The only difference is the candles represent a different period of time.
This is why I encourage all comments. After the comment, it allows me to expound on it, and hopefully others are able to glean something from it.
I've mentioned many times how the rule is for a candle to pass through one end of the cloud, then at least hit the other side. WE see that happening on the downtrend and even continued moving south, and then in an uptrend, and in that case, movement was contained just on the other side of the cloud.
Why would this be so predictable? In other words how do we know with relative certainty that when a candle enters the cloud at one end, it will at least hit the other end?
Again, we are talking about the mean. One end is an average of the high and low of the last 52 candles. The other end is a simple average of the tenken and kijun, and it is plotted 26 candles in advance of the last measured candle. Inside the cloud represents the ultimate in the markets balance and equilibrium. Once the candle finds it way outside the cloud it has broken loose of the equilibrium. In essence, as traders we are really looking for opportunities that will present itself outside the markets balance. As traders, we don't like equilibrium. Many times we close a trade when the candle hits the top or bottom of the cloud as the candle approaches it from the outside. Once inside the equilibrium zone, namely the cloud, things aren't nearly as predictable nor do they move with the same one way conviction.
As we already studied, price action is predictable when it is in an extreme area relative to the cloud. Another thing that is predictable is, initially, the cloud will act as support or resistance on the initial hit.
hmmmmm
