Nuances of trading with the Ishimoku indicator
Some quite a while ago we published lessons on trading Ishimoku indicator by Andrei Lukin, links to which you can find below. Today we will return to this topic, refresh our memory and try to answer some questions related to practical use of the rules of these lessons. This article is written in the form of a question-answer, but to fully understand its essence we recommend to take a look at the literacy on the Ishimoku indicator.
Lessons on the Ishimoku
- Lessons on Ishimoku: the indicator, its components and basic signals
- Trading with Ishimoku: the cloud, its purpose and trading signals
- Lessons on Ishimoku: market entry and stop orders
- Trading with Indicator Ishimoku: Chinkou Span and its signals
- Lessons on Ishimoku: interaction with candlestick analysis
- Lessons on Ishimoku: Interaction with Channels and Elliott Waves
QuestionWhen the TC and the CC move towards each other due to an impending
turn and cross, is this also a "dead cross"?
Reply: If there is a cross between the Tenkan Sen and Kijun Sen, it will be a cross. If the Tenkan Sen is on top, it is a "golden cross", the Tenkan Sen on the bottom is a "dead cross".
Question: Ishimoku is a great indicator. This morning I drew this picture on the 4-hour chart to show the most likely movement.
Reply: According to this figure, we have to wait for the confirmation of the cross by the Chinkou Span on the breakdown of the price chart and then the price breakdown of the clouds. Then there will be a change trends. If there is a rebound, then your option would be appropriate.
- I didn't wait for confirmation at that moment, just compared everything and went up almost immediately after making the figure. I put up the chart because the levels haven't changed much since then: just as I thought, we reached the KC and are successfully pulling away from it. The red line is the projection of that massive cloud on the daily chart.
- Here I would like to tell you that you put too big parameters on the indicator. As a consequence - the lag of signals, or even their absence. As I understand from the figure, this is H4. My "dead cross" was formed much earlier from the first black candle with the opening at 1.9950. At that time the price broke through the Tenkan and Kijun and the Senkou Span changed the color of the cloud, which is a strong sell signal. And by the time you finally got a cross, my Tenkan and Kijun had already given a reversal signal. And a couple of candles after you suggested we look at the pattern, I already had a golden cross. You didn't get a single signal. And those that did were irrelevant.
Question: Tell me, do the settings you published only for the pound, or for other pairs, too?
Response: The settings of the Ishimoku indicator selected for TF of one instrument are perfectly suitable for other currency pairs as well. To make it easier for you to use the selected settings for other instruments, take advantage of the opportunity to make a template.
Question: Andrey, tell me, do you change the parameters of the Ishimoku indicator in some way depending on the market situation (I mean on the same instrument and on the same TF)? You said that you use standard settings for the daily TF, but the chart shows different ones.
Response: Yes, I changed the settings for the daily schedule a bit - brought them closer to our realities of life. That is, I took the fact that nowadays the work week is still 5 days. Hence the slight change in parameters: 10-22-66 (two working weeks - one working month - one working quarter).
Question: Andrey, a question to you as an expert on Ishimoku: haven't you tried to put the Chinkou line ahead of the chart? Only a reversal: if, according to the classic method, Chinkou crosses the price chart, then in the new version - the price crosses the taken out Chinkou.
ReplyWhy would you do that? Let it stay the way it was designed by the creator of the indicator. Of course, the fact that people are beginning to experiment with this oldest instrument deserves attention. But I myself, in fact, am conservative in such matters. Again, it is necessary to test such a vision of the indicator on history and in real time. I think it will take about 3-4 months. Try it out, experiment. Then share your successes.