ADA 1D chart update using the Ichimoku Cloud 20,60,120,30 settings:
The Ichimoku Cloud Lagging Span (Tenkan Sen) is indicating that the mid point of the short-term momentum is upwards.
The Ichimoku Cloud Base Line (Kijun Sen) is indicating that the mid point of the mid-term momentum is sideways.
The Ichmoku Cloud Lagging Span (Chikou Span) is indicating that momentum is upwards at the moment. Note that the lagging Span (Chikou Span) is safely above the Price from 30 Periods ago.
ADA is still safely in the Bullish Zone of the Ichimoku cloud. Note that we have had a Cloud (Kumo) Twist into a new Bullish Green Cloud for this 1D timeframe. For the Ichinoku Cloud System, this Cloud (Kumo) Twist is FULL Bullish Confirmation for this 1D timeframe.
ADA is still above the Bollinger Bands Middle Band Basis 20 Period SMA. After such a big rise, a re-tracement back to the BB Middle Band shouldn’t come as a surprise if it happens. Note that the Lower BB is moving upwards indicating we may see some consolidation or a potential dip to the VPVR POC.
ADA is below its Least Squares Moving Average (LSMA) a close below this level is a potential SELL signal for traders who use this indicator.
ADA is still safely above its 50EMA for this 1D timeframe.
For your viewing pleasure, I have added various potential support zones.
Note that the last 3 daily Volume Bars have closed above its Volume 20 Period Moving Average, we still have a few hours left to see if this daily Volume Bar closes above or below the volume 20 Period Moving Average and whether it closes Positive (Green) or Negative (Red).
Note that ADA is still above its Volume Profile Fixed Range Point of Control (VPFR POC) for the fixed range i have selected.
Note that ADA is still above its Volume Profile Visible Range Point of Control (VPVR POC) for this charts visible range.
The Average Direction Index (ADX DI) is indicating the trend strength is very strong with the ADX (Orange Line) at 60.16 above its 9 Period EMA (Black Line) which is at 54.99. The +DI (Green Line) has dipped to 29.82 but note that the -DI (Red Line) has also dipped to 4.72, this indicates that while Positive Momentum has dropped, so has Negative Momentum. This is a good thing and indicates that while Positive Momentum weakened, Negative Momentum has also weakened slightly for this 1D timeframe.
If we close this daily candle BELOW the LSMA then we may see a further drop into the 1st potential support zone area and the VPFR POC, alternatively, depending on what BTC does, ADA could consolidate & range sideways within a range above the VPFR POC. If ADA does drop to the Conversion Line (Tenkan Sen) or the Bollinger Bands Middle Band Basis then those could be good levels to acquire more ADA at a cheaper price.
I’m just posting this for the ADA 1D timeframe but you can easily apply these indicators to higher timeframes to enable to to pre-empt any potential upwards or downwards movement on the lower timeframes.
I hope this is helpful with your trading and hodl-ing.
Great TA! Just curious, have you had better success with the 20 60 120 settings rather than the classic 9 26 52? Also what books or resources did you use to study ichimoku for crypto? Thanks!
entertheroach
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@jaybau, I find the 20,60,120,30 settings work great for me with Crypto. A lot of people are confused about what the Conversion Line (Tenkan Sen) and Base Line (Kijun Sen) are. People treat them like Moving Averages or EMA's but the are actually High and Low Mid Points for the short-term and mid-term momentum for whatever period you are in and value value you have selected. Because i use the Tenkan Sen and Kijun Sen correctly as midpoints, the 20,60,120,30 settings work great for me. Essentially by doubling the Ichinoku cloud settings, the levels you are seeing on the 1D are almost the 2D levels, this works brilliantly because crypto is very volatile and traded 24/7, 365 days a year. The original 9,26,52,26 was developed using the old Japanese trading days, these old settings still work well for traditional markets that close but i find the doubled setting better. Karen Peloille's Book Trading with Ichinoku is a good book and also Ichimoku Charting & Technical Analysis by Charles G. Koonitz is also a great read but note that they say "don't change the settings ;-). As with anything, its best to find experiment and find what's best for you. Here is a piece i wrote back in Jan about the Ichimoku Cloud. I hope this is helpful. Enjoy
jaybau
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@entertheroach, Awesome, I'll read the link you gave. And I also just got Koonitz' book - excited to read through it. He has a section there for Bitcoin but doesn't really say anything about the settings lol.I'll definitely have more questions! Keep it up man
entertheroach
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@jaybau the general consensus by most if not all authors & traditionalist is to keep the old settings, if you experiment with both, you’ll soon find the best settings that suits you. The crucial thing to remember is not to use the Tenkan Sen & Kijun Sen as Moving averages. They are high & low mid points. So rather then the Tenkan Sen being a mid point of the last 9 candles, with the new setting, it becomes a mid point for the last 20 candles, the Kijun Sen moves from being a mid point of the last 26 candles to a mid point of 60 candles. Karen’s book is great but she makes 1 mistake on stating that when the Tenkan Sen crosses above or below the Kijun Sen that doesn’t mean anything, she’s very, very wrong.
jaybau
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@entertheroach, you mention a cascading effect in using multiple timeframes. Where can I find more info on how to use multiple timeframes in timing/determining entries and exit? In Koonitz' book, he only briefly talks about timeframes, but I was hoping to learn more on how to use them together. Also in your explainer post I saw you were using 12h, 6h, 3h and 1h. Is there a reason for this as opposed to using 4h and 1H to supplement the 1D and 1W timeframes?
entertheroach
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@jaybau no particular reason for the timeframes I used. The multiple timeframe is done of my own research & practise. Think about it like this, in the timeframes you are using, check where the price is in relation to the various indicators in the IC system. Are the leading span supports holding or have they become resistance, where is the price & what is the Tenkan Sen & Kijun Sen doing in the 1hr, 2hr, 3hr & 4hr. If the price drops into the bearish zone on the 1hr then it may drop into it on the 2hr ect. The same is applied in the an uptrend & breakout. I hope this is helpful. Note that if there isn’t enough data then the Ichimoku Cloud can be missing certain parts on certain timeframes.
jaybau
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@entertheroach I haven’t read hers yet but it’s crazy to think about it that she says it doesn’t matter because Manesh Patel has literally one trading strategy built on Tenkan/Kijun cross lol