Trading with Ichimoku Clouds: The Essential Guide to Ichimoku Kinko Hyo Technical Analysis

by Manesh Patel

Overview

Ichimoku Kinko Hyo is a technical system that illustrates support and resistance values in a simplified form and is considered an extension of the very popular candlestick charting system. In fact, the system was built on the idea that at "one glance" you should be able to determine whether an instrument is in equilibrium (consolidation) or out of equilibrium (trending).

Written by Manesh Patel—one of the pioneering U.S. practitioners of Ichimoku trading and administration of Kumotrader.com—Trading with Ichimoku Clouds offers a detailed look at this proven approach as well as its technical strategies. Chapter by chapter, it shows you how to create and implement a trading plan based on this discipline that can easily be tailored to your trading style.

Along the way, it also takes you step by step through the entire decision-making process, from entries and exits to triggers, in order to test the trading plan created and ensure you've developed a successful system that fits your personality and circumstances.

Other topics touched upon throughout this accessible trading guide include:

• Why this approach works with all time frames and all tradable instruments

• The five essential indicators associated with Ichimoku Kinko Hyo

• Which strategies can easily be adopted for stocks, futures, bonds, and other vehicles

• How Ichimoku Clouds work in both bull and bear markets

• How trading psychology influences trading

• How to perform post-analysis of a trading system and then optimize the system with this information

• And much more

Filled with in-depth insights and expert advice, Trading with Ichimoku Clouds will help you implement a proven strategy designed to capture trends that maximize profits and minimize losses. If you're looking to become a better trader, following some of the characteristics within this system is a step in the right direction.

Product Details

ISBN-13:	9780470634790
Publisher:	Wiley
Publication date:	05/20/2010
Series:	Wiley Trading , #473
Sold by:	JOHN WILEY & SONS
Format:	eBook
Pages:	240
File size:	13 MB
Note:	This product may take a few minutes to download.

About the Author

MANESH PATEL, CTA, is the President of EII Capital Group, a financial company that offers a variety of services, including money management, consulting, and trading. He is a technical trader whose technical foundation is built around a Japanese trend trading system called Ichimoku Kinko Hyo. With Ichimoku Kinko Hyo, Patel trades the following instruments: currencies, futures, options, stocks, and commodities. He is actively involved in Ichimoku trading and runs www.ichimoku.net and www.kumotrader.com, which has 125,000 subscribers and is ranked 260 among active Forex Web sites. Patel is a member of the National Futures Association (NFA) and received his master's in engineering from Georgia Institute of Technology.

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Table of Contents

Introduction ix

Background ix

Components of a Trading System xv

Chapter 1 Ichimoku Components 1

Tenkan Sen 4

Kijun Sen 10

Chikou Span 19

Kumo Cloud Components 25

Senkou Span A 27

Senkou Span B 28

Kumo Cloud 30

Chapter 2 Ichimoku Trading Plan 41

Components 41

Strategy Description 42

Chapter 3 Ichimoku Backtesting 45

Backtesting 45

EURUSD—A Two-Year Backtest 46

Summary—Two Years of Backtesting 134

Chapter 4 Post-Analysis 137

Examining the Backtest Results 137

Optimize Trading Plan 144

Chapter 5 Ichimoku Strategies 149

Ideal Ichimoku Strategy 150

Chapter 6 Ichimoku Time Elements 161

Ichimoku Time Elements 161

Chapter 7 Applied Trader Psychology/ Doug Laughlin 171

Is It as Easy as Just Being Taught a New System? 172

The Problem We Have with Getting in Our Own Way 172

Is There a Conspiracy Against the Small Trader? 173

Traders Myth—Smart People Make the Best Traders 174

Losing Trades Are Acceptable 175

A Successful System Will Fortify Your Convictions 176

Self-Sabotage and How It Applies to Your Trading 178

In Summary—Trader Psychology Overall 179

Chapter 8 Day Trading with Ichimoku 181

Consequences of Trading without a Trading Plan 184

Trading Plan 185

Backtesting 186

Conclusion 192

Chapter 9 Conclusion 193

Ichimoku Analysis Sheet 195

Bibliography 199

About the Author 201

Index 203