Step #1 Wait for the Price to Break and close above the Ichimoku Cloud.
Ichimoku cloud trading requires the price to trade above the Cloud. This is because it's a bullish signal and potentially the beginning of a new up-trend.
The cloud is built to highlight support and resistance levels. It highlights several layers deep because support and resistance is not a single line drawn in the sand. It is several layers deep.
So, when we break above or below the Ichimoku Cloud, it signals a deep shift in the market sentiment.
A high probability trade setup requires more layers of confluence before pulling the trigger.
This brings us to our next requirement for a high probability trade setup.
Step #2 Wait for the Crossover: The Conversion Line needs to break above the Base Line.
The price breakout above the Cloud needs is followed by the crossover of the Conversion Line above the Base Line. Once these two conditions are fulfilled, we can look to enter a trade.
The Ichimoku Cloud indicator is a very complex technical indicator. The indicator is even used as a moving average crossover strategy.
Now, we’re going to lay down a very simple entry technique for the Ichimoku Kinko Hyo trading system.
Step #3 Buy after the crossover at the opening of the next candle.
Ideally, any long trades using the Ichimoku strategy are taken when the price is trading above the Cloud. Our team at TGS website has adopted a more conservative approach. We added an extra factor of confluence before pulling the trigger on a trade.
So, after the crossover we buy at the opening of the next candle.
Step #4 Place protective stop loss below the breakout candle
The ideal location to hide our protective stop loss is below the low of the breakout candle. This trading technique accomplishes two major things. Here is an example of master candle setup.
First, it’s significantly lowering the risk of losing big money. Second, it helps us trade with the market order flow.
Since this is a swing trading strategy, we’re looking to capture as much as possible from this presumably new trend. We’ll be looking to trail our stop loss level below the Cloud or exit the position once a new crossover happens in the opposite direction.
The next logical thing we need to establish for the Ichimoku trading system is where to take profits.
Step #5 Take Profit when the Conversion Line crosses below the Base Line
We only need one simple condition to be satisfied for our take profit strategy.
When the conversion line crosses below the base line we want to take profits and exit our trade.
Alternatively, you can wait until the price breaks below the Cloud, but this means risking to lose some parts of your profits. In order to gain more sometimes you have to be willing to lose some.
Note** the above was an example of a BUY trade using the advanced Ichimoku trading strategies. Use the same rules for a SELL trade – but in reverse.
Ichimoku cloud trading requires the price to trade above the Cloud. This is because it's a bullish signal and potentially the beginning of a new up-trend.
The cloud is built to highlight support and resistance levels. It highlights several layers deep because support and resistance is not a single line drawn in the sand. It is several layers deep.
So, when we break above or below the Ichimoku Cloud, it signals a deep shift in the market sentiment.
A high probability trade setup requires more layers of confluence before pulling the trigger.
This brings us to our next requirement for a high probability trade setup.
Step #2 Wait for the Crossover: The Conversion Line needs to break above the Base Line.
The price breakout above the Cloud needs is followed by the crossover of the Conversion Line above the Base Line. Once these two conditions are fulfilled, we can look to enter a trade.
The Ichimoku Cloud indicator is a very complex technical indicator. The indicator is even used as a moving average crossover strategy.
Now, we’re going to lay down a very simple entry technique for the Ichimoku Kinko Hyo trading system.
Step #3 Buy after the crossover at the opening of the next candle.
Ideally, any long trades using the Ichimoku strategy are taken when the price is trading above the Cloud. Our team at TGS website has adopted a more conservative approach. We added an extra factor of confluence before pulling the trigger on a trade.
So, after the crossover we buy at the opening of the next candle.
Step #4 Place protective stop loss below the breakout candle
The ideal location to hide our protective stop loss is below the low of the breakout candle. This trading technique accomplishes two major things. Here is an example of master candle setup.
First, it’s significantly lowering the risk of losing big money. Second, it helps us trade with the market order flow.
Since this is a swing trading strategy, we’re looking to capture as much as possible from this presumably new trend. We’ll be looking to trail our stop loss level below the Cloud or exit the position once a new crossover happens in the opposite direction.
The next logical thing we need to establish for the Ichimoku trading system is where to take profits.
Step #5 Take Profit when the Conversion Line crosses below the Base Line
We only need one simple condition to be satisfied for our take profit strategy.
When the conversion line crosses below the base line we want to take profits and exit our trade.
Alternatively, you can wait until the price breaks below the Cloud, but this means risking to lose some parts of your profits. In order to gain more sometimes you have to be willing to lose some.
Note** the above was an example of a BUY trade using the advanced Ichimoku trading strategies. Use the same rules for a SELL trade – but in reverse.
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