Ichimoku methods with harmonic patterns trading
Just completed WEBINAR -> Trading with Ichimoku Clouds Recorded Webinar - Events by Manesh Patel regarding trading with the Ichimoku method.
Manesh, as the method expert, starts with an Introduction to the ichimoku method, a bit of history when, how, by whom the method was created. Easy: Ichimoku, think Japan!
He is using Ichimoku techniques in his trading, but for better entries timing he is using Gann price and time square method (btw: see our TradingArsenal project on this topic -> Gann trading - market turns timing - price projection ).
Ichimoku=pretty simple and powerful method. Can be applied on any instrument, any timeframe, easy to understand and use, pure price action, base for a non lagging system.
What’s cool is that Ichimoku incorporates several methods/concepts inside: Fibonacci, supply/demand, volatility, price action and more…
Manesh explains how Ichimoku lines are constructed:
all these example screenshots come from the Webinar. Watch it for better understanding (just hope by the time you read it Manesh Patal webinar is still available online under the link provided at the begining of this post)
Manesh teaches to look for scenarios when price is in the cloud and comes out. These are the places where strong trend may start. Ichimoku trigger line defines when to enter and Ichimoku method goal is to keep you in the trend as long as possible.
I did not find the presented examples to clear unfortunately. Too many, too quickly, too messy – at least for beginners. Anyway, it gives idea about the method and couple of extra Ichimoku trading hints from the expert are definitely worth the 30 mins spent on the video. Catch his comments about the entry as close as possible to the cloud for the best Risk Reward, green and yellow line to be flat for some time before the trigger and/or multi-timeframe (MTF) Ichimoku analyses.
Guess more details one can learn from Patel’s book “Trading with Ichimoku Clouds”
I have my first thoughts about the practicality of this method in my harmonic trading, but let me reseach a bit more on the topic before I will post my 0.02$. Please share your opinions, if you use Ichimoku techniques in your daily trading...
Last edited by kor4x; 11-24-2012 at 03:50 PM.
To better understand the method I did a small web research and found this article.
This is explains the Ichimoku method very well -> A Walk Through Ichimoku | DailyFX
here is the chat I had with a trading mate regarding combining Ichimoku methods with Harmonic Trading (at least my Harmonic Trading). Comes from Facebook chat:
Samuel Moroni Lucas I haven't watched this yet but if I'm going to use Ichimoku it's for trade management more than trade entry. What about you Kor?
Kor Fx Trader just trying to make my summary after watching this webinar
Samuel Moroni Lucas You will find that your PRZ zone will form above the Ichimoku and as price breaks through the Ichimoku it confirms a good reversal. It will be interesting to see what you find.
Kor Fx Trader ichimoku is so much lagging comparing to my trading entries
Kor Fx Trader you wrote very well what I think
Samuel Moroni Lucas Yep. It does lag a little like a moving average. What do you use?
PRZ, price action, supply / demand. Anything else I'm missing?
Kor Fx Trader let's call it PRZ and sup/dem, price action is lagging
Samuel Moroni Lucas Very interesting. So you don't wait for price to test the full range of fib levels in the PRZ like Scott Carney advocates?
Kor Fx Trader Not sure what Scott advocates, but I do not wait for any lagging confirmations. No. Of course there are pros and cons as always.
Samuel Moroni Lucas Very true. Waiting for a confirmation in the PRZ helps protect against strong moves but entering without that confirmation enables you to catch the short fast turns. I don't have the experience yet to be able to see how strong the market is before entering at the PRZ
Kor Fx Trader As repeated several times on the www.TradingArsenal.com I like Sam Seiden's approach with his supply/demand methodology. His concepts I use to observe how price enters into PRZ zone. I am sure you have seen the profitability enhancers attached in the Sam's thread.
Hi kor, nice thread , i'm experimenting the Ichimoku from about 2 months now, it's really a very good system, the main problem with this is to understand how do multi TF analisy. For Ex. If you are bullish on 1h and 4h tf it's not safe to take bearish signlas on 15tf unless you have a very valid reason for that ... As you have told the ichimoku incorporate other techniques in it and if you know the system you will easily see them... Look at this video for a better understanding How does Ichimoku have W.D. Gann, Elliott Wave, and Fibonacci Theory build in? - YouTube
Here you can find a list of the signals provided by the Ichi system Ichimoku Trader - Signals
I strongly suggest the book of Patel and the look of this video:https://www.ichimokutrade.com/p/education/videos/
IMHO The Best book about Ichimoku Kinko Hyo is the book from Nicole Elliott who is a Mizuho Corporate Bank's Senior Analyst in London.
For those of you who understand german, this book from Karin Roller is much better while dedicated to Trading with Ichimoku.
Karin Roller is a former analyst from the Stuttgart Exchange in Germany.
Last edited by parisboy; 11-26-2012 at 01:51 PM.
@parisboy: life is like a box of chocolates ... thanks a lot for this info. True, looks interesting, shorter and better. Kidrock to comment soon I hope.
When I take a look at the cloud "breakout" method of Patel I see a lot of false breakouts..
I'm sure using a MTF analysis will reduce the number of false breakouts, but to be honest I cannot remember seeing any strategy with so many false signals .
Originally Posted by kor4x
that is correct wickedwin, i have the same impression.
For trend followers this may be a valid strategy. But for harmonic traders, where we aim for precise entry and good reward:risk ratio, Ichimoku is not giving much benefits. Not for entry for sure.
Ichimoku method may possible act as trailing stop method, so support traders in position management, but that is it.
Hope to learn something intersting from this new book listed by parisboy.
Another 0.02$ maybe...
continuation patterns - like continuation Gartley pattern, continuation Butterfly pattern or continuation 121 pattern can be traded if/when trade initiates in the Ichimoku cloud...