Simplified Ichimoku

Hello Everyone, this is a thread to record my journey in discovering a simplified version of Ichimoku. The 'real' Ichimoku thread is being written by Emma over at the 'Ichimoku' thread, please refer to hers if you'd like to learn in-depth about the indicator and follow her journey. I do not wish to spam her thread with my ideas, (paper) trades and ramblings and I hope she doesn't mind the few trades I already posted there.

The core strategy of the thread comes from a Youtuber called Trade Pro and his 4 year old video with the title 'Crazy Results Best Ichimoku Cloud Trading Strategy Proven 100 Trades'.

I know what you're thinking, a thread based on a YT video. Well, I am a visual learner and as much as I respect Emma's excellent thread, I needed a video and a more simplified version of an Ichimoku strategy to really get started on this wonderful indicator. I will be posting trades, musings and thoughts on the journey, feel free to contribute!

Trade Pro used the 1 hour EURUSD chart to backtest the strategy 100 times, I trade both forex and futures and will explain in my next post how I differentiate between the two (this is a method I am just starting out on so we'll see how this evolves). You can see his backtest results in the attachment, take it for what it's worth (and watch the video, it describes the rules and shows a number of examples).

So the ground rules of the strategy based on Trade Pro's video:
- We use the default Ichimoku indicator.
- We wait for the instrument (5 or 30min chart) to make a move outside the cloud and close (this is our signal to prepare)

- We go long at market after we closed above the cloud AND the lagging span of Ichimoku also closes above the cloud AND the current cloud (the cloud that is 26 bars ahead of price) is green/bullish
- We go short at market after we closed below the cloud AND the lagging span closes below the cloud and the current cloud is red/bearish

(It's important you wait for all these conditions to line up, it may take a while or price might close back inside the cloud in which case the trade is scrapped)

- For stop loss Trade Pro advises in more general terms, I like to put my stop a few ticks beyond the 3-candle highest high/lowest low if possible, otherwise the Tenkan/Kijun lines should serve as pretty accurate stops

- For target, Trade Pro advises going for 2R and I tend to concur. From what I have seen so far, it's well worth going for 2R as you will not have a crazy high win rate, especially on 5min. I tend to put an alert to 1R and just pull my stop to break even.

Attached you can see an on-going XAUUSD and Oil CFD trade that I am currently in. In the next post I will attach many already closed trades from yesterday and today.

In terms of futures vs forex... So far I noticed that forex doesn't like 5min charts but futures are more than okay. The 30min charts trades I observed on forex tended to work very well (but it's a very limited sample).

So for now I am trading futures (US100/NQ, GER40/DAX, XAUUSD and Oil) on 5min and the four major forex pairs (EURUSD, GBPUSD, USDCHF, USDJPY) on 30min.

Have a look at the attached charts, many examples already.

And further examples on gold, NQ and oil.

Got stopped out on DAX and just waiting with a limit buy order to enter the signal that NQ gave just while I was typing a post here.

EDIT: Unfortunately Ctrader doesn't show the future cloud's current state so I am using Prorealtime and Tradingview to check if we have all conditions lined up.

Made a screenshot of the current EUR and CHF charts, as you can see the cloud border lines are totally overlapping each other, this means no trade (yet).

The NQ trade I was waiting to enter just completed 2R with that burst up (caught it with that limit order by about 2 ticks ). Nice.

Had an oil trade from earlier, exited at break even after it reversed from 1R but it seems to be dropping towards original TP again.

Thank you for this thread.

Indeed, this method is very simplified compared to the traditional Kumo Break. For the example, I posted a chart from the book by B.M.Sadekar. He imposes more conditions to validate the Kumo Break. But everyone is free to choose their approach; there is no exact method for using Ichimoku, and the variations are numerous. I will follow your thread with interest, while also continuing with Emma's, which is very interesting.

Thank you Tyross, this is an experiment and by no means would I declare the method to be advanced like the ones you quoted. But I love the symplicity of it!

Good luck with your new thread .

Interesting blast from the past...I traded Ichimoku for awhile few years ago...here is how I traded it on 1 Hour TF Dow Futures last few days. Blue line is Kijun-Sen.
If I see you continue and progressing with the thread, I will open more insights.

Kijun-sen (usual MA) wipes all profits in moments like these:

Really interested in insights for Ichi+DOW, not only trend history drawings trading.

Wasn't in front of the screen yesterday but back with a vengeance this morning and some interesting lessons on the futures market 5min charts.

Failed trades on DAX and NQ. What's interesting about NQ is that ES produced a short signal not long after we entered our NQ trade. And the ES trade won the fight.

Oil was an interesting case of pulling stop to break even after reaching 1R on the trade in the first bigger trade. Decided to give it another try with a tighter stop but we got stopped out again. No harm done. I still think gold and oil work best so far with this method on the 5min.

Be careful simplifying Ichi: every single component is lagging as every MA-based indicator. In complex they are +- not bad filtering each other.

USDJPY on the 1hour is going up nicely. Even if I traded the 1hour timeframe original method that Trade Pro tested, the entry would have been at 5am my time, little early

Continuation of yesterday chart Dow Futures 1 Hour TF.

It is not about how you enter, as entry is mostly irrelevant, it is about how you managing your MM after the entry. Yes, there are losses during CHOP but losses can be kept to the "minimum" if one utilizes smart MM. Most of my time spent last few years is on analyzing the best ways to use MM. MM is individual subject, as everyone has different scale of pain they willing to take, before realizing to continue with the trade or not.

Today's 4 out of 4 winners on the major forex pairs on the 30min timeframe. Wow.

EUR reached 2R in a flash but the other 3 were more 1.5 R trades. So that's 6.5 R's by NY session open. Nice.

I only traded the GBPUSD one heavily, decided to stick with 1.5R while I was out on errands, good thing I did that, turned back from 1.8R not long after.

Fantastic results on 30min forex so far

Today's results on futures were more negative on 5min while on 30min a real mixed bag so far.

Oil as per usual did its thing for 2R on 30min, gold at break-even, US100 a loss and a break-even, US500 break-even, GER40 might lose current trade, there was a nice 2R winner during Asia.

I'll be honest, 5min gives so many damn signals that it's becoming too hectic, I might drop that one and just concentrade on 30min/1hour. Let's see.

You will loose with anything lower then 15 Min TF..I use 1 Hour TF, but it creates issues with SL, however it is what it is..find your MM.

Here are hourly trades last week and 3 days this week.

I think someone somewhere even reduced the Ichi to the blue ma on your chart

Ah -just seen this. Please ignore my post above