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[FF_Goal]

Hi

Another try at analysis of counters. Finally managed to find a counter with very bullish (I think) setup.

1) It has been executing a bullish upmove in the past 5 periods

2) The counter has broken it's one year high on a relatively high volume which bodes well for the counter.

3) Chikou line does not face any resistance but clear sky ahead for the uptrend.

4) The leading kumo twist has occurred and widening to create the support needed in times to come.

5) The nearest support for this counter (which can be used as a cut loss) will be the chikou shadow.

If the price did manage to continue to rise, then the cut loss price can be shifted to a price/kijun cross instead. I decided not to use the price/tekan cross for now since it might give a false signal especially considering that the counter has just broken it's one year high.

[Kumo Trader]

Hi FF_Goal,

From the chart you posted, this looks to be a solid pick.  As you pointed out, you have a nice breakout from the previous range with volume confirmation.  The fact that price exceeded the 1 yr high doesn't hurt, either.    The angle of the chikou span indicates good momentum and the tenkan sen and kijun sen, being in such close proximity, should also help bolster potential support at that level as price continues up. 

Regarding your stop-loss, are you placing that just below the chikou span level highlighted by point 2 on your chart?  I think you are prudent to not use the tenkan sen to manage your stop-loss, as that structure is much too short-term to allow the trade to adequately develop before getting stopped out.  As you pointed out, the kijun sen is a better vehicle for your stop-loss. 

One thing that I would strongly recommend doing is including charts for 3 separate time frames for each equity you are interested in trading.  In addition to the chart for your execution time frame, you will want to include a chart for one time frame above and one time frame below.  This is multiple time frame analysis and it allows you to get a better overall picture of the health of your equity, to ensure you have chosen the most propitious entry with the best probability for success.  For instance, a particular time frame may look absolutely perfect for a Long trade, but when you switch to a time frame above, you notice that price is just under a very thick kumo, which obviously throws a potential wrench in the works for your trade idea.  If you don't utilize multiple time frames, you don't have the benefit of this knowledge and are increasing your risk.

So - I like the chart you provided but will caveat my comments by saying you need to look at a time frame above this and one below to ensure the probabilities are firmly in your favor.

Good stuff, FF!  Keep it up!

- Ian

[FF_Goal]

Hi Ian

For the stop-loss, I had the intention of placing it at point 5, highlighted by yellow lines.

Regarding the time frame, I only have access to the daily and weekly data for plotting the Ichimoku, am using a free EOD data update. Thus am not able to go to a lower time frame. But will surely take your advise by looking at the weekly time frame for a more confident trade placement.

Am wondering if switching to (7 22 44) or even (1 7 14) other than what I am using (9 26 52) would in fact give me a sort of "lower time frame" since that is a faster response.

Btw, the counter has rallied again today to $7. It's definitely less stressful to wait for a proper trade set-up with lots of positive signals before entering. Fundamentally, its rise has also got to do with its China-link as most Chine-link counters has been rising for the past few trading sessions.

Unlike the other counter which I analysed and is now at $2.40 (touching a low of $2.34) with news that one of its key management personel is leaving.


Thanks once again to you and all who took the time to response to my posts. It's amazing that I still get to learn new stuff (or stuff which is explained in Wiki but sort of forgotten) with every reply. Very grateful for all the detailed reply and encouragement.


Cheers
FF_Goal

[Kumo Trader]

Hi Ian

For the stop-loss, I had the intention of placing it at point 5, highlighted by yellow lines.

Regarding the time frame, I only have access to the daily and weekly data for plotting the Ichimoku, am using a free EOD data update. Thus am not able to go to a lower time frame. But will surely take your advise by looking at the weekly time frame for a more confident trade placement.

Am wondering if switching to (7 22 44) or even (1 7 14) other than what I am using (9 26 52) would in fact give me a sort of "lower time frame" since that is a faster response.

Btw, the counter has rallied again today to $7. It's definitely less stressful to wait for a proper trade set-up with lots of positive signals before entering. Fundamentally, its rise has also got to do with its China-link as most Chine-link counters has been rising for the past few trading sessions.

Unlike the other counter which I analysed and is now at $2.40 (touching a low of $2.34) with news that one of its key management personel is leaving.


Thanks once again to you and all who took the time to response to my posts. It's amazing that I still get to learn new stuff (or stuff which is explained in Wiki but sort of forgotten) with every reply. Very grateful for all the detailed reply and encouragement.


Cheers
FF_Goal

FF,

It would be ideal if you could find a charting service that offers more than just the Daily and Weekly time frames to round out your analysis (say a 4H chart, at the very least), but if you cannot, then you just need to do the best you can with what you've got (or find a different charting service).  Though they do not offer sub-1D time frames on their free service, I like both www.prosticks.com and www.prorealtime.com for looking at equities.  They project the kumo correctly into the future, for starters, and are 100% free for end-of-day data.  In addition, for a monthly fee, they do offer access to real-time data and lower time frames, so you may look into that if you are serious about using Ichimoku in your trading.

While I would encourage you to always do your own research, I would not recommend trying to "tweak" the settings in Ichimoku to try to gain some magical advantage, as there is none to be had.  Proper use of Ichimoku is much more dependent upon how you read and act upon the signals and sentiment provided by the chart than by any particular combination of settings.

Best,

Ian

[sunman4008]

Hello,

Attached is the chart for Daily for Costco.   I personally would not trade this on the bullish side right now.   Price is far away from the Kijun Sen.  The Kijun Sen is also flat.   

You have two major resistance points for it to break in order to continue on a bullish trend.

-Manesh

[Kumo Trader]

Hello,

Attached is the chart for Daily for Costco.   I personally would not trade this on the bullish side right now.   Price is far away from the Kijun Sen.  The Kijun Sen is also flat.   

You have two major resistance points for it to break in order to continue on a bullish trend.

-Manesh

Hi Manesh,

Thanks for dropping by! 

From what I can tell, FF_Goal is not looking to trade the stock for the U.S. company "Costco" but rather an equity for a company that is traded on his country's exchange ("Cosco").  If you look at his posted chart, I think you will see the difference as his is trading for around $6.00 while Costco is around the $60 level...

Best,

Ian

[FF_Goal]

Although I've read about drawing those chikou span turning points and kumo shadows as support and resistance, especially on multiple time frame, I've hesitated doing for a while because it looks too messy for me.

Until lately, decided to give it a go by colour coding each of these set of support and resistance.

Generally, I find it very useful and productive and what I had observed is that the support/resistance lines seem to work very true when compared to a lower time frame. For instance, when I am doing trading on stocks and looking at the daily timeframe, the weekly support/resistance given by chikou span and kumo shadows seem to be very strong.

In the example below, the stock seem to be trying to break the $3.62 resistance line as formed by the weekly chikou span and having a tough time.

Also, just the day before, I thought that that support formed at $3.38 by the daily kumo shadow won't be reached so fast but it indeed approaches it very rapidly.

Thus my feeling now is when looking at the daily charts, the ease of cutting these S/R lines in order of difficulty is as follows:
1)daily chikou S/R (easiest to break)
2)daily kumo shadows
3)weekly chikou S/R (very strong region)
4)weekly kumo shadows (not sure yet)

With this in place, at least it allows me some way to calculate the risk-reward when entering a trade with weak buy signal and not necessarily having to wait for ultra strong signal like kumo breakout with steep tenkan and kijun lines.

[Hooper]

Totally agree. Here is one example. Seems working better in longer time frame.

[FF_Goal]

Just to update. The counter broke $3.38 (daily kumo shadow) and $3.32(weekly kumo shadow) yesterday to close at $3.30.

The next support at $3.20 is formed by the daily chikou span which will be deem weak. After that, the next strong support is all the way down at $3.05 formed by the weekly chikou span. The company's quarterly result will be announced tomorrow and we'll see how it all pans out.

[FF_Goal]

It closed at $3.08 today, reaching an intra-day low of $3.05 where the weekly chikou span is.

It's amazing that Ichimoku is working so well on all front. We can also clearly see that the counter couldn't break the $3.50 which is just at the bottom of the kumo.

Plus all those S/R lines, especially from the weekly (Kumo shadows, Chikou Span) seem to work quite well.

[hardyfoster]

from your charts it looks like you need to zoom out
or
shift your chart
so you can see the leading kumo (far right)

[FF_Goal]

from your charts it looks like you need to zoom out
or
shift your chart
so you can see the leading kumo (far right)

To update, the counter closed at $3.37 (just below the daily kumo shadow S/R) for the week with a weekly low at $3.05 (at the weekly chikou span S/R).
I need no clearer proof of the importance of these S/R lines together with the standard readings of ichimoku.

To recap, so far, the weekly chikou span S/R and daily kumo shadow S/R seem to worked the best in order of priority. I place less importance on the daily chikou span S/R lines because am observing the counter in the daily timeframe so that should occupy the least priority. As for weekly kumo shadow S/R. they are too far off to be near the daily price-action.