Ichimoku Kinko Hyo Strategies

[Soultrader 12]

This is a continuation of this thread here: http://www.traderslaboratory.com/forums/f34/ichimoku-kinko-hyo-2358.html#post18052

 

I have been experimenting with this indicator with equities and have found them fairly interesting. What I have done is filtered out the clouds and applied only the 9 period and 26 period moving averages.

 

Also note that the moving averages are not the classic type which uses the average of the closes. The Ichimoku version uses the midpoint of the spread of each price bar. What you get in return is a fairly smooth moving average without the chop. I have found this to be more efficient compared to regular moving averages.

 

What I am doing is adding the 9 period and 26 period Ichimoku moving averages as a confirmation tool in combination with volume spread analysis and market profile (mainly where price is relative to value). The reason for this addition in my trading is due to the fact that volume in Japanese stocks can not be trusted like the futures market I have been used to.

 

Shown below is the indicator applied to the Nikkei futures in action. (I dont use this for futures but is just an example) Notice how smooth this tool is and very easy to identify the trend. Alot of strategies can be born with this tool. This is just an introductory post, but further insights will be added and comments are welcome.

 

[Nick1984 10]

James the way the MA's pan out across with this particular type of indicator is really nice and not to dissimilar from those in Walters "trend" trade in the FX section. I think that the flatness of the MA's really helps to identify momentum changes however being a MA system like you mentioned they can only really be used to confirm moves.

 

I don't know what this looks like on an equities chart but from what I notice the MA's start to identify the change in momentum around 2-4 candles after the move starts.

 

If you can maybe post up a chart with some MP or pivot points so we can see how the indicator interacts at key price levels. I know that lots of people find the concept of Pivots strange in equities however in my experience they actually work very well!

 

Another thing is that like I said in the original post, I think that this indicator won't work so well on the shorter time frames. In the chart above you don't get too many signals given off by the MA's crossing over.

[Soultrader 12]

I actually do not use pivot points across Japanese stocks as they do not work. The indicator is a trend following indicator in which I try to hold a position to capture intraday trends.

 

The key here is to identify when the markets are chop vs trend. Some stocks tend to trend very well while others only move swiftly due to institutional orders. Unfortunately I can not post many charts as I am taking snapshots from the office and emailing them to my house. I currently do not have a charting software from my house.

 

Walters trend following indicator looks fairly smooth and nice also. However, I cant code much stuff into the insitutional platform through Reuters. (personally... its a piece of crap charting software and they charge like $700 a month for it) The best I can do now is to input data through excel and chart it. Hence, I have customized Nikkei TICK, TRIN, and PC Ratio.