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[Kumo Trader]

Hello all,

Welcome to our 2nd Analysis Challenge! 

The purpose of this ongoing event is to allow traders interested in learning more about Ichimoku Kinko Hyo to try their hand at analyzing a "mystery" currency pair from an Ichimoku perspective.  It is not a competition, but rather truly a "challenge" where you can put what you've learned thus far in the Forum to work!  We all had a great time in the last Challenge and learned a great deal, so I'm hoping this one is even better!

I have posted six (6) charts for the mystery currency pair below, each one corresponding to a different time frame.  Please download and print these charts so that you can use them for analyzing this pair from a multiple time frame (MTF) point of view. 

So - some rules of the game:

1) Please do NOT try to identify which currency pair we are analyzing.
By concentrating on only the charts in front of you and not knowing
anything about the dynamics of the particular pair or any fundamentals,
we can better hone our analysis skills for the known currency pairs we
trade later on.

2) Try to respond with your answers to the challenges within at least
24 hours.  We have a very international group here and we are all in
different time zones, but 24 hours should allow us all to get our
answers back and keep up the momentum.

3) Try to keep your answers relatively short and concise.  This will
keep the thread manageable and let everyone get their input in without
a huge amount of interpretation.

4) Understand that the Challenge is strictly educational.  We are not concerned
with who came up with the "best"
answer, only that we all learn from each other and keep a very open
mind.  Seeing how others interpret the same chart is always an
eye-opening experience, so be open to that and let's keep our egos out
of this.

I plan on following this currency pair for as long as it takes for us
to cover the main points of analysis, which are:

- Multiple Time Frame Analysis
- What type of trader are we today?
- Support and resistance structures
- Entries
- Exits
- Position sizing considerations/money management

ONE IMPORTANT NOTE:  I want you all to state in your first reply what your hypothetical trading account equity is!  This will be critical in terms of determining your position sizing and money management.  I thought it would be better to have you each decide how much "cash" you have to trade rather than me dictating that, so that we can get a more comprehensive view of money management at several different account equity levels.

SO - Down to business!  Your first challenges are below:

CHALLENGE #1

For each of the 6 charts you have in front of you, categorize the
sentiment (e.g.: Bull, Bear or Neutral) for each one.  Back up your
sentiment with reasons, but be concise.

Once I receive your answers we can move on to Challenge #2...

Looking forward to your answers!

- Ian 

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[Odie]

Ian,

I will start with an equity of only 500. I will be trading in mini lots and I will trade no more than 3 lots. On average, I will trade 2 lots per trade.

Monthly, Weekly & Daily: Bullish. Tenkan is above the Kijun and the Chikou is clearly above the price action.

4H: Neutral Bear. Chikou is in the price action and the Tenkan is below Kijun. Price action is below the Kumo

2H: Bear. Chikou is below the Price action and the Price is below the Kumo. Tenkan is below Kijun.

1H: Neutral Bear. Chikou is stuck in the price action.

  Ian, the pair's name is on the charts. Do you want us to start again? I promise not to tell. I was looking at the ranges to gauge the MM for the pair. It wont affect my anaylsis but I dunno how the rest of the guys feel about it.

Simon

[Kumo Trader]

  Ian, the pair's name is on the charts. Do you want us to start again? I promise not to tell. I was looking at the ranges to gauge the MM for the pair. It wont affect my anaylsis but I dunno how the rest of the guys feel about it.

Simon

LOL - Simon - Nice catch!!  What an oversight on my part.

I just posted 6 new charts in my original post (this time without the name) just to make it an even playing field for all. If you could modify your original analysis (sorry!) and re-post, that would be great!

Thanks,

Ian

[pilgrim]

Hi Ian,
Please don't laugh but I am playing with an equity of only $129 and trade 2 lots per trade.
Even though I gain a few cents a trade I am winning. Once I master Ichimoku I will try and find more money to play with.
 
1. Monthly Chart.( Bearish )
a) Price is under cloud so bearish.
b)Chikou Span under the price so bearish.
c) Tenkan-Sen is horizontal but turning a bit so no trend.
d)Kijun-Sen.  Price is lower than Kijun-Sen  so it is still bearish but price is slowly changing to a bullish situation.

2.Weekly Chart.( Bearish)
a)Price is under cloud.
b)Chikou Span is neutral now as it is in the middle of price , so it may be turning to a bullish state.
c)Kijun-Sen. I see that the price passed though the Kijun-Sen line so I think there is a small bullish change.
d) Tenkan-Sen was moving down the chart so it showed a bearish trend but I think there is a small bullish change.
e)Tenkan-Sen line is about to cross the Kijun-Sen line from the top so it might show a sell.

3) Daily Chart. (Bearish)
a) Price is under cloud.
b)Tenkan-Sen was moving down the chart so it showed a bearish trend.
c)Kijun-Sen.  Price is lower than Kijun-Sen  so it is  bearish.
d)Chikou Span was bearish because the price was above it

4) 4H Chart. (Bearish)
a) Price is under cloud.
b)Tenkan-Sen line moving horizontally across the chart but is still bearish.
c)Kijun-Sen.  Price is lower than Kijun-Sen  so it is  bearish.
d)Chikou Span was bearish because the price was above it.

5) 2HChart. (Bearish)
a) Price is under cloud.
b)Tenkan-Sen shows a horizontal trend.
c)Kijun-Sen.  Price is lower than Kijun-Sen  so it is  bearish.
d)Chikou Span was bearish because the price was above it

6) 1H Chart. (Slightly bearish)
a) Price is under cloud.
b)Tenkan-Sen was moving horizontally  and now down so I think that it is bearish.
 It looks like it is crossing the Kijun-Sen line from the top down so this is bearish maybe a sell postion.
c)Kijun-Sen.  Price is lower than Kijun-Sen  so it is  bearish.
d)Chikou Span line was bullish because the price was below it.

Cheers,
Alan

[draco]

CHALLENGE #1

My hypothetical trading account equity is $2500.

MONTHLY
Bear
CS below price; price below Kumo; TS below KS; bearish kumo, very thick, descending steeply.
Possibility of change to more neutral position, as TS and KS are converging and becoming more horizontal, and CS almost over candlesticks.

WEEKLY
Neutral, bearish bias.
CS over candlesticks.
Bearish TS/KS cross about to take place, but this is weak as it is above kumo, although prices are already blow kumo
Kumo is flat-top and could attract prices back up, but a bearish kumo twist has recently taken place.
Possibility of rapid change to more bearish position: if prices continue falling, TS/KS crossover will occur and CS will fall below prices.

DAILY
Bear
CS far below prices
TS below KS, falling steeply; price below TS, dragging it further down.
Prices below kumo; kumo is rising, but there is a bearish kumo twist approaching in about 7 days.

4H
Bear
CS below prices
TS below KS below kumo
Kumo very bearish

1H
Neutral
Price attempting to enter kumo at point where it is thin and horizontal
KS and TS tangled and developing horizontally
CS over prices
Kumo thin and levelling off

[Odie]

Ian,

You dont have to apologize. I need the practise anyways. I will post tomorrow. I spent the entire day in a meeting with guys going 2 words a minute. Its made me extremely sleepy. Dont leave with me. 

Simon

[Kumo Trader]

Hi Ian,
Please don't laugh but I am playing with an equity of only $129 and trade 2 lots per trade.
Even though I gain a few cents a trade I am winning. Once I master Ichimoku I will try and find more money to play with.[qu

No problem at all, Pilgrim!  The only caution I would mention is that you need to keep in mind your money management rules at all account equity levels.  What size positions are you taking?
 

1. Monthly Chart.( Bearish )
a) Price is under cloud so bearish.
b)Chikou Span under the price so bearish.
c) Tenkan-Sen is horizontal but turning a bit so no trend.
d)Kijun-Sen.  Price is lower than Kijun-Sen  so it is still bearish but price is slowly changing to a bullish situation.

You also will want to mention that the tenkan sen is below the kijun sen as this is one of the first things we look at when determining sentiment.  Good call on the flattening nature of the tenkan sen.  The kijun sen is also flattening, due to the relative consolidation over the past 2+ years.  We are still Bearish in sentiment on this chart, but given the proximity of the kijun sen and tenkan sen as well as the proximity of the chikou span to price, it is a weak bear configuration.

2.Weekly Chart.( Bearish)
a)Price is under cloud.
b)Chikou Span is neutral now as it is in the middle of price , so it may be turning to a bullish state.
c)Kijun-Sen. I see that the price passed though the Kijun-Sen line so I think there is a small bullish change.
d) Tenkan-Sen was moving down the chart so it showed a bearish trend but I think there is a small bullish change.
e)Tenkan-Sen line is about to cross the Kijun-Sen line from the top so it might show a sell.

This chart is neutral to bearish.  Tenkan Sen and Kijun Sen are just kissing, with the TS dropping down to meet the KS from a bullish stance above.  The chikou span is within the price curve and price is trading below the prevailing kumo.  We do have a Bull kumo in its nascent stages, so that adds to the potential for a bounce off of the kijun sen on this time frame. 

The thing to keep in mind is that we do not want to "guess" what price will do or state that "there will be a bullish change" as that can lead to preconceptions and personal biases that can make our analysis less than completely objective.  Better to just observe the current state of price and then come up with what possibilities exist.  This is our "If...Then" trading mindset in action.

3) Daily Chart. (Bearish)
a) Price is under cloud.
b)Tenkan-Sen was moving down the chart so it showed a bearish trend.
c)Kijun-Sen.  Price is lower than Kijun-Sen  so it is  bearish.
d)Chikou Span was bearish because the price was above it

Good analysis, Pilgrim!  Again, you will want to keep in mind the relative location of the tenkan sen vs. the kijun sen (in this case the TS is below the KS, which is bearish), so its worth pointing out in your analysis.  You may also want to point out the relative angle of the kumo, which in this case is very acute and heading downward.  This can help us identify momentum.

4) 4H Chart. (Bearish)
a) Price is under cloud.
b)Tenkan-Sen line moving horizontally across the chart but is still bearish.
c)Kijun-Sen.  Price is lower than Kijun-Sen  so it is  bearish.
d)Chikou Span was bearish because the price was above it.

Agreed.  Price is trading relatively close to the tenkan sen and we see the kijun sen beginning to flatten out, both of which indicate loss of downward momentum.  We begin to see the shorter-term consolidation more clearly on this chart.

5) 2HChart. (Bearish)
a) Price is under cloud.
b)Tenkan-Sen shows a horizontal trend.
c)Kijun-Sen.  Price is lower than Kijun-Sen  so it is  bearish.
d)Chikou Span was bearish because the price was above it

This chart shows the short-term consolidation much more clearly as both the tenkan sen and kijun sen are flat and on top of one another.  We are still technically bearish, but only weakly so given the aforementioned flat TS and KS as well as the flat prevailing kumo.

6) 1H Chart. (Slightly bearish)
a) Price is under cloud.
b)Tenkan-Sen was moving horizontally  and now down so I think that it is bearish.
 It looks like it is crossing the Kijun-Sen line from the top down so this is bearish maybe a sell postion.
c)Kijun-Sen.  Price is lower than Kijun-Sen  so it is  bearish.
d)Chikou Span line was bullish because the price was below it.

We really are not bearish on this chart, Pilgrim, but rather NEUTRAL.  Price is trading under the kumo and it is additionally under the kijun sen, both of which are bearish, but the tenkan sen is above (but barely so) the kijun sen (bullish) and the chikou span is above price action (bullish).  The kumo is very weak and flat, again showing loss of trend at this time frame.

Nice job, Alan!

[Kumo Trader]

CHALLENGE #1

My hypothetical trading account equity is $2500.

MONTHLY
Bear
CS below price; price below Kumo; TS below KS; bearish kumo, very thick, descending steeply.
Possibility of change to more neutral position, as TS and KS are converging and becoming more horizontal, and CS almost over candlesticks.

I agree with your assessment on this time frame, Draco.  The only question I have is regarding your comment about the CS being "almost over" candlesticks.  Do you mean that the CS is close to the price curve and the possibility exists for it to pierce through that area?

WEEKLY
Neutral, bearish bias.
CS over candlesticks.
Bearish TS/KS cross about to take place, but this is weak as it is above kumo, although prices are already blow kumo
Kumo is flat-top and could attract prices back up, but a bearish kumo twist has recently taken place.
Possibility of rapid change to more bearish position: if prices continue falling, TS/KS crossover will occur and CS will fall below prices.

I agree with you on the sentiment.  Your statement that "Bearish TS/KS cross about to take place" may or may not come to fruition, so in order to maintain our "detached" objectivity, it's a good idea to at least offer the other possibility, which is that the TS could also potentially bounce off of the KS. 

DAILY
Bear
CS far below prices
TS below KS, falling steeply; price below TS, dragging it further down.
Prices below kumo; kumo is rising, but there is a bearish kumo twist approaching in about 7 days.

4H
Bear
CS below prices
TS below KS below kumo
Kumo very bearish

1H
Neutral
Price attempting to enter kumo at point where it is thin and horizontal
KS and TS tangled and developing horizontally
CS over prices
Kumo thin and levelling off

Well done, Draco! 

[Raffi12]

Hello comrades

account equity $2000

monthly:bear, chikou bellow the price curve, tenkan bellow kijun, bearish kumo.

weekly: neutral, chikou neutral,we had bullish tenkan-kijun cross but the two lines now challenging each other, we have one horizontal line of senkou B both in present and future kumos, price bellow kumo but tiny future bull kumo.

daily:bear, chikou bellow the price curve,tenkan bello kijun, bearish kumo, price bellow kumo.

4h chart:bear, like daily.

2h chart:bear, chikou below the price curve, tenkan-bellow kijun, bearish kumo, weaknesses: price crossed before both tenkan-kijun up but failed and headed bellow it again and fights still there coz both lines is flat.

1h chart: neutral, chikou above the price curve but can change his identity pretty easy,neutral tenkan-kijun, bearish kumo but flat senkou B and the kumo getting thicker and price can easily break it if he wants to change to bull.

cheers,

Raffi

[Odie]

Hi all,

My account equity will be $500.

Monthly: Bearish
Chikou Span is below the price action
TS is below the KS.
Span A is below Span B
Price action is well below the thick kumo.   

Weekly: Neutral Bear
Chikou Span is stuck in the price action.
TS is overlapping the KS, looks like it might cross below to show bear depending on the other TFs.
Span A is below Span B supporting a bearish sentiment.
There is a flat top Kumo which means that current downtrend might bounce back.

Daily: Strong Bear
Chikou is below the price action and running from it.
TS is below the KS
Span A is above Span B.
Price action is well below the thick Kumo

4H & 2H : Bearish
CS is below the price action
TS is below the KS
Span A is below Span B
Price is away from Kumo

1H: Neutral
TS meeting KS with a possibility of a TS cross below KS.
CS is above price
Price is below the Kumo but only just.

Simon

[pilgrim]

Hi Ian,
Thank you for all your help.
I am enjoying taking part in the Analysis Challenge and am learning heaps.
Please help me with one problem I have.
I am still not sure what you mean by if Chikou Span  is above or below price.
I draw the horizontal lines off the Chikou Span and can see the resistance lines.

 Do I look at the old  price which is above or below the tip of the Chikou line or the current price?
( I have been checking to see if the old price which is situated above or below tip of CS line and saying that it is above or below CS.)
I cannot see how the tip of the Chikou line can be above or below the current price when it is always at the current price but behind in the chart.
I am having sleepless nights trying to sort this problem out.

Please could you show me on one of the charts the area that I must look at.
Sorry to put you to all this trouble.

Cheers,
Pilgrim

[Kumo Trader]

Hi Ian,
Thank you for all your help.
I am enjoying taking part in the Analysis Challenge and am learning heaps.
Please help me with one problem I have.
I am still not sure what you mean by if Chikou Span  is above or below price.
I draw the horizontal lines off the Chikou Span and can see the resistance lines.

 Do I look at the old  price which is above or below the tip of the Chikou line or the current price?
( I have been checking to see if the old price which is situated above or below tip of CS line and saying that it is above or below CS.)
I cannot see how the tip of the Chikou line can be above or below the current price when it is always at the current price but behind in the chart.
I am having sleepless nights trying to sort this problem out.

Please could you show me on one of the charts the area that I must look at.
Sorry to put you to all this trouble.

Cheers,
Pilgrim

Hey Alan,

Don't EVER worry about asking questions on this forum.  That is why we exist!  We are all here to help you, so please feel free to ask whatever you have doubts about. 

In this case, a visual aid should help clear up your confusion about when the chikou span is "above" or "below" the price curve.  While the chikou span in the chart I provided is essentially directly left of the price action, we consider that "below" the price curve since the chikou span will always lag the current price action by 26 periods.  If the chikou span were trading on the right-hand side of the price curve, then it would be "above" the price and would indicate a more bullish bias is in-place.  Hopefully the chart will help make it more clear.   Now, keep in mind that this "left of price = below" and "right of price = above" model is only applicable when the price is headed DOWN.  When price is headed UP, the opposite is true; "left of price = above" and "right of price = below".  Make sense?  If not, keep asking questions!

You're doing great!  Don't sweat the details and don't lose sleep over this stuff!  It will all come together soon enough...

- Ian

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[pilgrim]

Hi Ian,
Thanks for the reply but I just can't visualise "left of price "and "right of price".

Cheers,
Pilgrim.

[draco]

Hi Ian

In reply to your question on CS in the monthly chart:

when I say it's "almost over" prices, I mean it's about to pass from a position in which it is slightly bearish (below prices) to a position of neutrality (hovering over the candlesticks). What happens after that I wouldn't speculate on.

I hope that's clear now.

- Draco

[draco]

hi Pilgrim

I had the same problem as you at the beginning (just a few weeks ago actually) and I solved it by thinking this way:

Chinkou span is used to compare current prices to prices 1 month ago, that's why it's shifted backwards.

So that's what I do - I look at the tip of the Chinkou line, and to compare it to prices 1 month ago I draw an imaginary vertical line through it, and I see whether CS is above or below the prices of 1 month ago - that tells me the relation between CS and price.

See attached example. Hope that helps,

- Draco

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