Technical Analysis Ichimoku by NSFX

Technical Analysis - Ichimoku Cloud

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Agenda • Background • The basic setup and calculations • Buy and Sell signals

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Background • Introduced in 1969 by Goichi Hosada.

• Ichimoku Kinko Hyo meaning “equilibrium at a glance” • Commonly applied in Asia and should be respected when doing analyses on Asian instruments • Based on a philosophy examining simple things in nature from a mountain top and how they act in their respective environment

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In the MT4: a) Tenkan-Sen b) Kijun-Sen c) Senkou Span A d) Senkou Span B e) Chinkou Span

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Decomposition 1. Tenkan-sen is the average value of the price for the first time interval (nine days), meaning: đ?‘‡đ?‘’đ?‘›đ?‘˜đ?‘Žđ?‘› đ?‘†đ?‘’đ?‘› =

đ??ťđ?‘–đ?‘”â„Žđ?‘’đ?‘ đ?‘Ą â„Žđ?‘–đ?‘”â„Ž(9) + đ??żđ?‘œđ?‘¤đ?‘’đ?‘ đ?‘Ą đ?‘™đ?‘œđ?‘¤(9) 2

2. Kijun-sen is the average value of the price for the second time interval, 26 days. đ??ťđ?‘–đ?‘”â„Žđ?‘’đ?‘ đ?‘Ą â„Žđ?‘–đ?‘”â„Ž(26)+đ??żđ?‘œđ?‘¤đ?‘’đ?‘ đ?‘Ą đ?‘™đ?‘œđ?‘¤(26)

đ??žđ?‘–đ?‘—đ?‘˘đ?‘› − đ?‘†đ?‘’đ?‘› = 2 3. Senkou Span A is the middle of interval between two above mentioned lines (Tenkan-sen and Kijun-sen) projected 26 days in the future; đ?‘‡đ?‘’đ?‘›đ?‘˜đ?‘Žđ?‘› đ?‘†đ?‘’đ?‘› −đ??žđ?‘–đ?‘—đ?‘˘đ?‘› đ?‘†đ?‘’đ?‘› đ?‘†đ?‘’đ?‘›đ?‘˜đ?‘œđ?‘˘ đ?‘†đ?‘?đ?‘Žđ?‘› đ??´ = 2 4. Senkou Span B is the average value of the price for the past 52 days projected 26 days into the future; đ?‘†đ?‘’đ?‘›đ?‘˜đ?‘œđ?‘˘ đ?‘†đ?‘?đ?‘Žđ?‘› đ??ľ =

đ??ťđ?‘–đ?‘”â„Žđ?‘’đ?‘ đ?‘Ą đ??ťđ?‘–đ?‘”â„Ž 52 − đ??żđ?‘œđ?‘¤đ?‘’đ?‘ đ?‘Ą đ??żđ?‘œđ?‘¤ (52) 2

5. Chinkou Span is the current closing price projected 26 days back 5

Interpretation 1. Tenkan-sen – also known as the Conversion Line – is interpreted as a simple moving average.

2. Kijun-sen – also known as the Base Line – similar to the Tenkan-sen, but on a longer time-frame.

3. Senkou Span A& B: The ingredients of the cloud. Area in between is shaded illustrating the cloud. Composition gives an idea of future trend.

4. Chinkou Span is the current closing price projected 26 days back and is used for comparison on the chart and defines potential trends.

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Signals When studying the Ichimoku Chart, it is important to notice the following: 1. Cross of Tenkan-Sen and Kijun-Sen 2. Closing price against the Cloud 3. Position of Chinkou Span 4. Senkou Span A & B Composition/Cross The more signals in sync, the stronger the signal. As always in Technical Analysis, we are looking for CONFIRMATION.

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Signals Signal 1: Cross of Tenkan-Sen (red) and Kijun-Sen (blue) Bullish: Red line closes above blue.

Bearish: Red line closes below blue.

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Signals Signal 2: Closing price relative to Cloud‌

Bullish

Bullish Tendency

Interpretation

Price Action

Bullish

Price above Cloud with bullish momentum

Bullish Tendency

In the Cloud, but past 2-3 days bullish

Bearish

Price below Cloud with bearish momentum

Bearish Tendency

In the Cloud, but past 2-3 days bearish

Bearish Tendency

Bearish 9

Signals Signal 3: Position of Kinjun-Sen (Green line)

Bullish

Bullish: Kinjun-Sen crosses above the closing price Bearish: Kinjun-Sen crosses below the closing price Remember that the KinjunSen is lagging 26 days and is also known as the “lagging mountain�

Bearish

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Signals Rising Market

Declining Market

Signal 4: Senkou A & B relationship

A is above B is a sign of a rising market.

A is below B is a sign of a declining market.

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Example 1

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Example 2

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Example 3

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Indicator

Example 1 CAD/JPY Daily

Example 2 AUD/JPY Daily

Example 3 EUR/JPY Daily

Tenkan-Sen vs.

Kijun-Sen

Bullish

Bearish

Bullish

Closing vs.

Cloud

Indecisive

Bearish

Bullish

Cloud Composition

Declining Market

Declining Market

Declining Market

Chinkou-Span

Positive

Negative

Positive

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