next »

[MarCo]

Hi there,

after having thoroughly analyzed FX charts I came to conclusion that 3 long positions might be reasonably expected to bear fruit, and these are:

- GBPJPY at 242.88
- EURJPY at 164.42
- CADJPY at 115.50 (see the attached chart screenshots)

All three of them occured almost at the same time, while they were supported by the 1d and 1w prices being unanimously above the kumo.

In addition, we know that on these pairs long positions are also supported by the prevailing carry trade.

I am brand new to Ichy - this is my second day. I didn't actually take the trades, just made the trade projections into my charting software.

My question is: somebody out there who's been using Ichy for quite some time now please tell me if my strategies are in line with yours, t.m. if I can reasonably expect these trades to bear fruit.

N.B. in all 3 cases the stop-loss is placed 10p below the kijun sen, and moved with the dynamics of it.

Thanks for the comments,

Marek

[Odie]

Hi Marco,

I actually went into the USD/JPY.. there will be a little difference in the price action since my pair included the USD strength and the weakness in the Yen. But the same principles would still apply. Unfortunately I couldnt tell you if you analysis is right or wrong as I usually use Multiple Time Frames to confirm or cancel out my analysis. How do you determine the entry, stop loss and take profits and are these points supported by any major structures, Kijun or Clouds of other timeframes?

Hope it helps
Simon

[MarCo]

Hallo Simon,

thanks for posting. I use multiple scales too - first of all, when I spot a trading opportunity on my major time scale, t.m. 4h, I tend to look at the daily and the weekly charts for the same pair. Only if both of them are on the same side of the kumo, plus if the daily chart shows an overall ichy strength and sentiment in favorable direction, I am giving the trade a second thought. [ Lately I discorvered it is worth taking a short look at the 1h scale, too, since usually, when there's a major breakout on 4h, there has been one on 1h happening already for some time!! ] To cut the story short, yes, totally agree, multiple time scales are just a must-do thing...

Anyways, I actually base my trade opening on the most conservative ichy approach I've read about, t.m. I wait until all of the 5 traditional ichy entry signals are in place: price crosses kijun sen, kijun sen and tenkan sen cross over, price crosses the kumo and leaves it behind, chikou span crosses price 26 candles behind, kumo changes from bullish to bearish (or vice versa) 26 candles ahead. Of course, all of these signals have to happen in one direction, and clearly point towards opening a trade.

Then, the final arbitrary comes. First of all, I study the slope of the kijun sen, and the tenkan sen. If they tend to move in quite a unison in favorable direction (however, they are apart now, since the crossover already happened), and if they post solid, steep, non-flattening lines, I take it as a yes. Then, I check the price distance from the flat kumo top (or bottom), which serves as a magnet for price. If the distance is fair enough and the pair shows signs of redemption from the slavery of the flat kumo, I take it as a yes again...

My final "yes" to the trade is said when candles close beyond the support/resistance line produced (in accordance with the rules) on bottoms/tops of the historic chikou span line. I did some backtesting here, and found out that my actual trade signal is better to be based on the 4h candle closing beyond such a S/R line that happened: a. one level beyond the peak of the preceding kumo, b. one level ahead of the peak of the preceding price action.

Only in case all of these conditions are met, I'm opening my trade.

Now, here comes the trade exit. As I already mentioned in some other chatting room of this forum, after quite a solid backtesting I found out that the traditional ways of closing one's position according to the ichy rules do not produce sustainable results. That's why I use KAMA Binary Wave as a supplementary trading technique in order to help me with exact pinpointing of the trend reversals, so that I can cash in as much as reasonably possible from my already open trade position.

Usually, I wait for the KAMA Binary to post an opposite nr. (+1, -1) on the 4h. I do not take 0 for an exit signal. Also, in case the price has been skyrocketing for a couple of 4h candles already, I always tend to look at the hourly chart to see if it's been stalling there on the opposite side for quite some time. I also study the general ichy picture there to see if the overal ichy sentiment and strength of the trend show signs of weakening.

Once this happens, I am exiting my trade.

Well, as you probably noticed, I am only a newcomer to the Ichimoku trading system, that's why my strategy very likely needs some more testing and adjusting. I'd also be glad and thankful to any comments from anybody within this forum that would post a constructive crticism, and that would help me to actually trade better.

Anyways, this is what I came up with during the backtesting. I read some posts here by guys who have been using Ichy for a while - that's how I found out about the late trade exits based on traditional Ichy rules. I reckon exiting the trades when it's already too late was the reason why many of the guys who whitched to Ichy ended up losing money.

I think once this single weakness of the system is dealt with, it produces one of the best FX trading systems there are.

N.B. According to my backtesting, under this setup Ichy should produce twice as good results as my previous trading system based on moving averages and confirmed levels of traditional S/R...

Marek

Hi Marco,

I actually went into the USD/JPY.. there will be a little difference in the price action since my pair included the USD strength and the weakness in the Yen. But the same principles would still apply. Unfortunately I couldnt tell you if you analysis is right or wrong as I usually use Multiple Time Frames to confirm or cancel out my analysis. How do you determine the entry, stop loss and take profits and are these points supported by any major structures, Kijun or Clouds of other timeframes?

Hope it helps
Simon

[MarCo]

I just thought it might be better to include charts with graphic explanation of what my strategy looks like now.
(you know what they say, one picture is better than thousands of words...)

Anyways, this is my model trade. This is the very summary of my current strategy.

Comments welcome,

Marek

[MarCo]

And here comes the close of all of the 3 demo positions> please have a look at the charts attached.

According to my strategy, these are the exit points and the trend whould reverse now. It is most evident on CADJPY, since CAD is on its 30 years historical peak and the resistance is very hard.

I've just made 404 pips on these trades in two trading days, plus the interest from the carry - my only regret is I didn't put real money into this... :-))

I only started being involved in Ichy on last Thursday.

I AM EXCITED ABOUT THIS!!!

N.B. I know, this probably was an exception, and I might not alwasy make this high pip amounts in this short time. I might lose sometime - no strategy is bulletproof, simply can't be... But still, Ichy seems to be a very, very healthy system.

Marek

[MarCo]

Well, I have to admit (humbly) that Ichimoku Kinko Hyo has its own ways of determining trade exits.

Being a fresh Ichimoku newbie, my 3 model trades on JPY crosses that I suggested to close within this forum topic few days ago as stated above, turned into even more profit bearing than originally expected.

That's why, taught by this example, I needed to adjust my suggested exit strategy which was up-to-now based solely on the KAMA binary wave postings.

When determining my new exit strategy, I was very much "enlightened" by the topics and comments published in this forum, namely by Ian's approach towards exiting his trades and the way he waits for the market to actually "whisper" the right moments of exit to him.

On a practical level, exiting an Ichimoku trade should be executed at the very point the market invalidates the previous trend, when it sort of cancels the signs it originally gave us for opening the trade, and renders new signs favoring the trade in an opposite direction. As Ian mentioned somewhere sometime, it is advisable to exit the trade at the point where one has no more confidence whatsoever to open another short-term trade in the same direction as is the direction of the already opened trade. This approach is much less stressful than any other exit strategy I know of, including my own, previously suggested, based solely on KAMA Binary.

The problems with exiting acc. to Ichy rules that I run into during my backtesting stemmed from the fact that I've been basing my exit points on 4h charts. Some other post in this forum helped me to learn that it is better to keep track of where the candles are on the time scale 1 level (4-7 times) lower than the time scale I base my trade openings at. In my case it is the 1h chart, since my basic scale is 4h.

My new trade exit strategy is described in detail in the attached screenshots for GBPJPY - the best gainer out of all FX markets during the last week.

In favor of my new exit strategy being accurate also speaks this fact alone: since I spotted the trade opening point last Friday, the pair managed to gain 500+ pips. I don't know how about you, but making 500p in just one week, on just one pair, seems like a pretty fair deal to me...

N.B. Of course, one shouldn't forget that such a monstruous price action is not to be expected every week. Current gains on YEN crosses are supported by a very solid fundamental picture that favors "trading on yields" right now - it seems that every single market participant tends to base his or her trades on (and is crazy about) the difference between the interest rates of the base currency and the referential currency, many times forgetting about the macroeconomy results of the country in concern; which makes YEN crosses so attractive for traders (BoJ is only content with having 0.5% interest rate, while other central banks, namely the bank of NZ (although caution there because of the latest intervention), AU, UK, SW, CA, EZ have much higher interest rates. This phenomenon is generally known as "carry trade", and in fact it means nothing else but: the more days one stays in a trade where the referential currency yields higher interest rate than the base currency, the more additional profit one makes on the interest differentials alone (interest rate differentials for every open position are calculated in the end of every FX day, t.m. at 9 p.m. GMT). This strategy has already brought vast, many 100k-s, profits to numerous hedging funds out there that do not do anything else but keep staying in their long-term carry trades, especially on the attractive YEN-denominated pairs. And, since hedging funds are the true FOREX market makers, they can find their own ways to influence other, smaller, market participants to actually support their trading strategies...

Anyways, to cut the story short, have a look at the attached charts for more insight. The other two suggested trades should be approached with the same mindset, t.m. a./ EUJPY - we'd still be in the trade, for the same reasons as in case of GBPJPY, b./ CADJPY - the originally suggested trade exit was in line with the new exit strategy (run a back test on 1h chart for CADJPY), so the trade is over now.

Marek