Ichimoku Trading Strategies NZDUSD 04 Sep- 2013 #2

This is an update of the previous ichimoku blog post on 09-Sep-2013.

Since the last post, the kiwi has moved upward in a gradual manner. The trade itself is sitting more than over 400+ pips (Entry on the white circle), stop loss level has shifted to cloud lo level covering the trade itself.

Current Review
From the current ichimoku charting, tenkan-sen, kijun-sen, chikou span are all above the kumo cloud. Tenkan-sen in particular, has been providing the support for the price action looking at the past activities. The gap between tenkan-sen and kijun-sen remained "small", reflecting the gradual upward trend on the price action, minimizing the possibility of downward reaction from price action itself. Another feature from the ichimoku charting itself, kijun-sen is quite a distant away from the kumo cloud, bear traders will have to sell down quite a number of pips to meet the next group traders waiting at the cloud hi. The most encouraging sign for buyers is the "thick" kumo cloud itself, where buyers and sellers fight out to determine the winner of the direction. It is not just technical analysis will determine how the change in in trend, fundamental will play an important role here.

Retrospective Review
The actual entry was made on the white circle. As mentioned in previous post, the chikou span was about to cut above the kijun-sen. However, decision has been made to enter the position then.

The first yellow line from bottom reflected the "ideal" entry level, where chikou-span has cut the kijun-sen.

The second line from bottom reflected another "ideal" entry level, with chikou-span cutting above the kumo cloud.

The first yellow circle from bottom would be based on price action cutting above the kumo cloud, and entering on the next period.

The second yellow circle from bottom would be another "ideal" entry level, with tenkan-sen, kijun-sen, and chikou-span all being above the kumo cloud.

The third to sixth yellow circle from bottom would be good entry when price action touches the first support level at tenkan-sen.

As usual, it always look like a perfect trading system on looking back. However, at the point of time, did we take the trade? I did not due to my own money management methodology.

Nevertheless, hope the retrospective review provides some insights on the use of ichimoku charting.

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