Tecnologia_Financiera

ICHIMOKU EXPLAINED PART 3: KINJUN SEN CROSS

NASDAQ:AAPL   APPLE INC
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Entry
The entry for the kijun sen cross is very straightforward - an order is placed in the direction of the cross once the cross
has been solidified by a close. Nevertheless, in accordance with good Ichimoku trading practices, the trader should
bear in mind any significant levels of support/resistance near the cross and consider getting a close above those levels
before executing their order.

Exit
A trader exits a kijun sen cross trade upon their stop-loss getting triggered when price crossing the kijun sen in the
opposite direction of their trade. Thus, it is key that the trader move their stop-loss in lockstep with the movement of
the kijun sen in order to maximize their profit.

Stop-Loss Placement
The kijun sen cross strategy is unique among Ichimoku strategies in that the trader's stop-loss is determined and
managed by the kijun sen itself. This is due to the kijun sen's strong representation of price equilibrium, which makes
it an excellent determinant of sentiment. Thus, if price retraces back below the kijun sen after executing a bullish kijun
sen cross, then that is a good indication that insufficient momentum is present to further the nascent bullish sentiment.

When entering a trade upon a kijun sen cross, the trader will review the current value of the kijun sen and place their
stop-loss 5 to 10 pips on the opposite side of the kijun sen that their entry is placed on. The exact number of pips for
the stop-loss "buffer" above/below the kijun sen will depend upon the dynamics of the pair and price's historical
behaviour the kijun sen as well as the risk tolerance of the individual trader, but 5 to 10 pips should be appropriate for
most situations. When looking to enter Short, the trader will look to place their stop-loss just above the current kijun
sen and when looking to enter Long, the trader will place their stop-loss just below the current kijun sen.

Once the trade is underway, the trader should move their stop-loss up/down with the movement of the kijun sen,
always maintaining the 5 to 10 pip "buffer". In this way, the kijun sen itself acts as a "trailing stop-loss" of sorts and
enables the trader to keep a tight hold on risk management while maximizing profits.
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