Disclaimer.. – I actually do not use most of the Indicator, at least not in the conventional widely accepted ‘textbook’ sense. The Kumo ( cloud ) is the most important element for me .
I’ll get straight on to describe how I like to use it . Anyone who is not familiar with how the Kumo is formed has access to a plethora of information on the internet by using a simple search .
As I’ve stated in the past. I do not use the Kijun sen – Tenkan sen averages, or the Chikou span, and blank them out on my charts. The crosses of Kijun and Tenkan are very problematic. I’m aware that these are an integral part if the Ichimoku system to most people who use it . I’m a simple fella, and they give too many false signals for my liking. If you use them and find them beneficial , that’s great. There’s a common thinking between new and some old traders alike ( the latter who struggle ) that your charts have to be chock full of crazies with all the bells and whistles blowing. ……Get naked guys, it’s very liberating.
My preference is to use the 30 minute timeframe and above . Far too much noise in anything below the 30……..Now for the voodoo. – I draw trendlines from the tops or bottoms to adjoin the cloud spans. I then look at price in relation to the trendline along with Candlestick formations to configure entry and / or strength of trends…………..I told you I was simple 😉
It’s actually not that far removed from how the cloud is supposed to be used, ( above the cloud bullish – below bearish ) yet it adds another dimension to the chart and can often cut out the false starts that trading the cloud breaks can give . Combine this with other trusted indicators that you use, It can be a rather powerful way of trading shorter term scalping – and for trading beyond the intraday.
I will add to this post in time to include some of the other indicators / Oscillators’ that i combine with the Kumo and candles. I want to leave things here for now in order to demonstrate the simplicity of the cloud – and how it can be used as a base for a system of trading. I’ve never been a big fan of indicators in trading. As you can see by my charts – I prefer them uncluttered so as not to detract from the greatest indicator of all …..Price.
I will include a few charts to demonstrate . All current charts. I’m not going to scroll back to find the sexiest set-ups as this is a method I use in my trading everyday. — Naked and sexy in the same post ? ……… I’m in a saucy mood today obviously 🙂
Same current chart of USDJPY viewed below on the Hourly
One of my working charts of AUDNZD below. A little rough around the edges as I haven’t changed anything. Some of you may know that I am holding longs .In part due to the action described on the chart .
Any questions – stick them in the comments. ….Here’s to another lovely days trading one and all .