Time Periods and Summary of Principles Hosada apparently put a lot of effort into optimizing the time periods used, especially as this was in the 1930s before the availability of computers. The periods of nine, 26 and 52 candlesticks or bars seem to work best, whatever the time scale, but this is obviously one place […]

Signals The first signal that you should look for is the lagging line crossing the cloud, as this will confirm the change of trend. Usually the price will already have started in the countertrend, but using the lagging line instead has the advantage that the signal is more likely to be correct than acting on […]

Interpretation Now we come to the essence of the Ichimoku technique. The first thing to notice is the way the price responds to the cloud. Frequently prices will turn when they hit the edge of the cloud, or sometimes they will run along the edge. In the chart above we can see some interaction in […]

Lagging Line Now we come to the fifth line on the cloud chart, and perhaps the simplest. It’s just the closing price line shifted backwards by 26 days or periods. Note that the cloud is shifted forwards by 26, and the lagging line is shifted backwards, or lags, by 26. This line is used a […]

The Cloud Lines Now this is where it starts getting interesting, and a little different from the other things you’ve learned about technical analysis. The trick to the cloud chart is that lines are drawn but then shifted in time, as you’ll see. Leading Span A is drawn by taking the midpoint between the Turning […]

Turning Line The Turning Line is similar to a moving average, but calculated a little differently. It’s sometimes also called the Conversion Line. It’s based on the last nine days. Instead of taking an average of the closing prices for each day, it’s just the midpoint between the highest high and the lowest low on […]

Module 10 – Cloud Charts – the Ichimoku Technique Introduction It is not often that there is a significant breakthrough in technical analysis, but it seems that we are witnessing one with the recent introduction of Cloud Charts to the Western world. These charts are a recently discovered form of technical analysis which was developed […]

Mechanical Trading Systems A mechanical trading system that can consistently beat the market – this is the Holy Grail for some traders. The idea of automatic profits is obviously attractive, but is it possible? In short, it is, but its not easy to do. A systems or mechanical spread trader is one who utilised a […]

Using Computers In the last 20 or 30 years, there’s been a big change in the way that trading has taken place. Thirty years ago it would have been unimaginable that you would be able to sit at home and trade actively and accurately on the markets using a simple kebetyboard and ‘television’ screen. And […]

Less Common Orders and Summary Less Common Orders These are not often used, but you may come across them, and even find them useful on occasion. The Market on Close (MOC) order tells the dealer on the trading floor to buy or sell for you in the last minute of trading. As prices can get […]