Madmacs, I prefer to stick to the traditional periods more often than not. It is true that the 26period moving average was based on a 6 day working week, but the 9 day period was derived as a period, from extensive backtesting that worked well with this period. Further the 9 and 26 day periods are used as potential stalling points within a larger move, and the periods are very much tied in to the cycle analysis I mentioned above
The charts are offputting to the uninitiated, but let me post my chart here with points where the Ichimoku study has worked well.
NB: the two important points are - i )the kumo (cloud) - it is a dynamic area of support/resistance. Thicker - more support or resistance; thinner - vice versa with clouds, prices tend to pierce through the cloud at the thin bits (line of least resistance). Prices that pierce the first layer of the cloud and then stall are considered to be ranging. ii) the Chikou span is a lagging indicator of todays price action (on my chart, a somewhat jagged purple line) needs to be in a favourable position to give strength to today's move. For example, has it got to break through a cluster of candles (resistance), does it need to break through cloud? Has it found support resistance at the studies 9/26 day MAs?
In my chart, Ichimoku has worked well, and the current break is as good as it has done for a long time. All the blue ellipses are points where the price has found support/resistance. You can see the break through the cloud in early Jan (pink ellipse) has its Chikou span that barely pierced the cloud and then fell back below it. And then the price immediately came back within the cloud and could not break above it again.
With our current price action, (in green ellipses), the Chikou also fell back into the cloud quickly, which suggests the move was not made with complete strength (which we know from our western ideas suggesting supply/resistance in this area). However, it a far more favourable picture, because the price continues to hover above the cloud; the cloud is also thin which can allow the chikou to break back out easily
One more point - i have not circled it, but you can see that quite often the chikou finds support/resistance at the candles as well.
AEX Price at posting:
0.0¢ Sentiment: Buy Disclosure: Not Held