Winning Ichimoku Strategy 19-Jan-2016

Winning Ichimoku Strategy for 1 min chart.

Commence trading on the second day of the week with a winning ichimoku strategy. To sell when the price is below the cloud. As always said, sell if below the cloud, buy if above the cloud, the basic fundamental for a winning ichimoku strategy.

The chart below reflected how the trade was entered and exited.

winning ichimoku strategy

How to trade a winning ichimoku strategy

I have marked out 4 areas on the chart to explain the trade I have executed.

It was about 9pm local when I looked at the ichimoku charting. Prior to 9pm, GBPJPY had been trending downwards. And the price action was far away from the cloud low at 1. If to go into short position at 1, with stop loss above the cloud, would have to risk quite a number of pips, meaning have to reduce my sizing to accommodate my dollar risk value, which was not what I wanted.

Waited for about 45 minutes, the price action when into the cloud. This was reflecting uncertainty in the price action. It could go higher or lower (again) when the price was in the cloud.

At point 2, carried out an assessment as the price action was penetrating the cloud high soon. Determined that for an effective long trade, will need the chikou span to go above the cloud high too. But the chikou span was just about to penetrate into the cloud. As such, placed a stop in order to go short in the event price action turned around. Indeed, price action turned around, and was triggered in.

Price did not go down immediately. It traded sideways before trending down. At point 3, tenkan sen and kijun sen were converging. Reduced position by half to take profit. Left the remaining position opened.

At point 4, price action continued to trend upwards. The price action went into the cloud. Decided to close the remaining position.

The above is a simplified winning ichimoku strategy that works on the fundamental principle: short if below the cloud and long if above the cloud.



Ichimoku Analysis on Light Sweet Crude Oil

Ichimoku Analysis: Where is the oil price heading?

Oil price has been in the news since its peak in Aug 2014. It is now 70% fall from its high then. Where will it be heading? Some said it will be trading below USD 30 per barrel before making a rebound back to the USD 60 per barrel level. Some said it will be hitting USD 20 per barrel and will be consolidating in that range for a long period time. What we like to do is to apply ichimoku analysis on the crude oil price to determine how a trader would like to trade on the light sweet crude oil.

We shall use the weekly chart of the light sweet crude oil first and shall follow with a daily chart to have a more detail on the price level and time target.

Weekly Oil Price using Ichimoku Analysis

Weekly Oil Price using Ichimoku Analysis

From the weekly chart, we can see that the oil price accelerated its fall from time in Sep 2014 to January 2015. The very concerning part from the ichimoku analysis is the cloud (kumo). The cloud was not thick initially. However, the cloud thickness increased gradually over time. The price action is currently trading much lower than the cloud low. The bullish traders have a lot to overcome to reach the cloud low, not to say to penetrate through the cloud high.

From the weekly oil price chart, with ichimoku analysis, the price target level is around USD 20 per barrel, some time from 20-Feb-2016.

Daily oil price using ichimoku analysis

Daily oil price using ichimoku analysis

The chart above is the daily crude oil price chart.

Using the ichimoku analysis, the price level of the crude oil will be much lower than the weekly price chart, at USD 15 per barrel, some time during 07-March-2016. Trader can aim to take short position between tenkan-sen and kijun-sen level, and with a stop loss level at a range comfortable to yourself at above the kijun-sen level. The price action has not traded above the kijun-sen level since November 2015 as it fell below the cloud.

The above ichimoku analysis is strictly for reference purpose. If you find it useful, do share it. If not, just have a laugh.

Ichimoku Strategy to USDCAD on 4hr period

Ichimoku Strategy applied to 4hr period

We have been discussing ichimoku strategy for on 1 min period charting. How about 4hr period charting? Can we do the same? The answer is yes. The principles remain the same, to long when above the cloud, to short when below the cloud. Again, that is not to say to immediately go long when above the cloud, or immediately go short when below the cloud.

I have recently taken a position in USDCAD. There is another aspect in which I have chosen the Canadian dollars. It is related to OIL! Crude oil price has been in the news since its fall from its peak in year 2014. Iran is going to add the number of barrels per day for oil production. Saudi Arabia insistent not to cut production number. Global economy remains fragile ahead. All these add pressure to the oil price to be lower.

Ichimoku Trading

Trading USDCAD with ichimoku

At the beginning of the year, the price action of USDCAD began to emerge from the cloud. Tenkan-sen and kijun-sen were both above the cloud, and together with the chikou span. The forward cloud reflected a thin bearish one. With the fundamental structure of the oil price mentioned earlier, I decided to go long with USDCAD. A very basic ichimoku strategy, to long when price above the cloud.

It is now about 2 weeks since the position established. Price action has moved upwards in quite a gradual manner. The price action has been above the kijun-sen all the while, and has bounced off when it touched kijun-sen. The cloud forward remains bullish and thick, providing the support required. I have placed a trailing stop with 300++ pips lock in and also a target level at 1.4600. Depending how the price action reveals itself as the time passes by, I may or may not adjust the target price level.

The trend is your friend, follow the trend.