The more strategies you know, the better chances that you will find the best one. For a trader, it is very useful to learn new material to improve his/her knowledge in trading. Even if you have never thought about using Ichimoku trading strategies, you should find out some basic things about it because it may happen that one day you will need this knowledge. It is also possible that the Ichimoku strategy will seem to you the most advantageous.
This article shows the basic points of the Ichimoku trading strategies, explains why it is called the Ichimoku cloud strategy and provides a couple of patterns of the top-notch Ichimoku strategies.
In general, Ichimoku indicator was invented in the 1930s in Japan. The inventor had a desire to develop the ultimate indicator for trading. He couldn’t do this, but he still did a good job. It took about thirty years to publish the results of the ready indicator. This indicator has become quite popular in Asia since the 1930s. However, it wasn’t well-known in the other parts of the world, including the United States, till the end of the 20th century. These days, the Ichimoku trading strategies are used by many traders, but they are still more popular in Asia than in the U.S.
In general, the idea of this indicator is very interesting. It aims to create a chart, where traders can see the balance at first sight. The Ichimoku indicator is one of the trend-following indicators, which means that a trader isn’t looking for bounds, but looking for breaks of levels. Apart from this, it has an included support and resistance levels calculation.
Unfortunately, the Ichimoku trading strategies are quite complicated, because it may be hard to understand all the elements involved. There are many lines that you need to detect to be able to work with it.
Let's find out what the cloud is. In general, it is a formation that shows the current time of the closing price. Apart from this, every graph of Ichimoku cloud strategy includes several lines, which are the standard line, trigger line, and lagging line.
All these elements also have other names. The cloud in Japanese sounds like Kumo. The standard line in Japanese sounds like Kijun Sen. The trigger line in Japanese sounds like Tenkan Sen. The lagging line in Japanese sounds like Chikou Span. It is good to know these Japanese names of the graph’s elements because sometimes you will come across them when using the Ichimoku trading strategies.
When you already understand the lines in the graph, it is good to find out when to enter and when to exit a trade. There are a few things that should happen before opening the position. First of all, it is necessary to wait until the trigger line crosses the standard line. This is the first signal that a trader can open his/her position. However, it is better not to make a move until you get the confirmation. When the cloud formation breaks as expected, you give a final signal to open a position. The lagging line also plays an important role. It is a kind of indicator of bullishness and bearishness. In a bearish scenario, a trader wants to see a lagging line below the price, when in a bullish scenario a trader wants to see a lagging line above the price.
There are diverse ways to handle the exit. It can be done when the price appears in the cloud once again, or when the trigger line and standard lines are crossed.
If you already know general information about the Ichimoku cloud strategy, it is good to look at some strategies examples. Hopefully, this will help you to single out the best Ichimoku strategy that can satisfy your trading style.
Double Ichimoku cloud trend strategy. You can use it for any market and for any period of time. To make a move, a trader mostly uses information from the two elements of the chart, which are the cloud formation and BBands stop. It is focused on the purchasing and selling momentum so that a trader could determine what direction the whole momentum has. It is considered to be the best Ichimoku strategy for the beginners because it is pretty simple.
Pallada Ichimoku cloud strategy. It utilizes five lines to foresee the changes. Thanks to this Japanese indicator, a trader can measure support and resistance zones, and momentum without using some additional indicators.
Forex THV trading strategy. This Ichimoku cloud strategy is very popular among technical traders that use it to conduct a technical analysis. According to this analysis, it is possible to distinguish support and resistance zones, the directions of a trend, and momentum. The major idea of this strategy is to present an accurate data at first sight with the help of standard line and trigger line.
There are many other Ichimoku trading strategies that are used by traders. Among them are the price chikou crossover strategy, the Senkou A senkou B crossover strategy, the price cloud cross strategy, and so on. It is possible to find the data on each of them on the web. Probably, you will also find the best Ichimoku strategy for you.
The reason why many beginning traders do not use the Ichimoku trading strategies is the complexity of the graph. At first sight, such graph can be quite intimidating. However, if you learn enough about the Ichimoku indicator, it becomes clear that it simple. Either way, you need to read a lot of information about it to find out whether this strategy can help you to get profit. Also, it is crucial to test a couple of them. Only this way, you will answer the question what the best Ichimoku strategy is. Yet, even if you don’t like this strategy, it is still useful to know at least the basics.