just keep a stoploss handy untill this breaks long..
I am reviving a lost interest in this Systems templates there is not a lot of information about in english
following is a recent post from "Kenko Hyo"..
of note are the volume confirmations..
required to be back tested on each stock.
have a close read... ............. Madmacs, thanks for your kind words. I have been a big fan of your chart work for a long time, so would be happy for you to take another look at cloud charts and hopefully find some benefit.
In regards to the modified parameters, it could actually work out better for some stocks ( I haven't tested modified parameters to a great extent), but I just prefer to stick with a more conservative reading and use western indicators and volume to lend some weight to what I am seeing.
Unfortunately, there is scant information out there. I think the best source still remains untranslated from Japanese.
I do have a book by Nicole Elliot, but I was disappointed with the lack of detail to some of the concepts she presented.
If you do decide to take a closer look here are some pointers -
Some general principles - 9,26 and 52 are key time periods. Not just for the spans but for basic wave analysis also. The times were derived from a lot of backtesting, but exclusive to Japanese markets.
Think of Senkou spanA as a weighted average of the last 26 days, and Senkou span B, a midpoint of the last 52 days (the indicator builders wanted something akin to a 50% retracement level - they felt that a stock might spend equal times above and below a mean point, and the span B acts as this mean).
The spans act as points of resistance/support (even for the Chikou). The moving Average studies also do.
Note the distance between the Chikou span and the candles, because this is how far a market can fall if in a correction if its looking for previous levels of support.
Watch for oversold prices well below the cloud start to gun up looking for a thin point in a cloud - it is potentially a good rally.
Use a correction back to the cloud as a possible entry position.
Judge how well the senkous work with volume analysis - can help enormously.
It does not matter what Senkou span is higher or lower. The idea is the thickness of the cloud. If a price comes into a cloud and stalls but you can see it thin out in the future there is a good chance that prices may move sharply when it gets to this thin area (you need future projections of the cloud for this) - - Look at BDG for a failed eg of this (a truly thin, horizontal cloud is aking to Bolinger Bands tightening up) Look at PDN for how even a thin cloud can provide support/resistance points.
With soar away prices use penetration of the MAs (Tenkan and Kijun-san) as exit points. In fact, do not worry too much about MA crossovers with Ichimoku. Give them weightings like a 1st and 2nd line of defence. But give far more attention to the cloud both in relation to the price action today and the Chikou span. A chikou below the price action is bearish simply because breaking through it takes some effort. A Chikou above the price action has eliminated a stalling point already.
Ichimoku charts work well in trending markets and not that well in ranging markets. However, they can indicate changes in direction quite well. The cloud typically supports/resists secondary corrections quite well.
Where the Senkou spans cross (cloud disappears) - the path of resistance is negligible. It always surprises me how the price actions tend to hone in on these points for continuing a down/uptrend.
Madmacs, hope this helps, and I hope this week isn;t too painful with a few of the indices looking more and more like they need to correct.
IOD Price at posting:
0.0¢ Sentiment: Buy Disclosure: Not Held
(20min delay)