Page 1 of 2 12 LastLast
Results 1 to 10 of 15
  1. #1
    Rookie Member Indicat's Avatar

    Ichimoku meets Fibonacci !!!

    Hi Traders,

    I always like to rumble around with my indicators, last weeks victim was Ichimoku.
    I wondered why the prefered setting is most of the time 9-26-52 with a 26 period displacement of the cloud.
    Something to do with a 'pre-second-world-war-Japanese-trading-week' or so...

    Nevertheless I'm a heavy user of Ichimoku. Without that cloud on my screen it feels like naked trading, still I wasn't completly satisfied with the settings so I got my golden ratio numbers and started to do some experimenting.

    As most traders know Ichimou is a combination of 5 lines which presents the middle of the highs and lows of a certain period. Different than a moving average which focuses on the close.

    Tenkan-Sen which is the fast line with a standart setting of 9.
    I changed this number to 8.
    Kijun-Sen which is the slow line with a standart setting of 26.
    This numer was replaced for 34.

    Hey don't fall asleep becouse now it gets interesing...

    The cloud is formed by two lines called Senkou A and B.
    The calculation of Senkou A are the values of Tenkan-Sen + Kijun-Sen divided by 2.
    So 8 + 34 = 42 /2 = 21, and 21 is also very Fibonacci.

    Senkou B was changed from 52 to 55.
    The displacement of the cloud was placed on te same value as senkou A on 21.
    Chikou Span the lagging line is also placed on 21 periods backwards.

    So instead of a 9-26-52-26, we've got a 8-34-55-21 setting.

    Ok this setting doesn't make you an overnight millioniare, but with a touch of golden ratio, Ichimoku just looks much better, less messy and what I noticed that Senkou A the fast line of the cloud becomes sort of a magnet for price, more predictable.

    The setting 13-55-89-34 gives also very good results especially for longer time frames.

    So what do you think fellow traders, go ahead put some Fibbs in your Ichimoku and let me know what you think.

    Cheers Indicat,

    p.s. 0,1,1,2,3,5,8,13,21,34,55,89,144,233,Meow...
    Last edited by Indicat; 11-23-2015 at 11:37 PM.

  2. #2
    Veteran Member Ronnel's Avatar
    Hi Indicat,

    Very nice thread! I tried your settings and did some back testing and it looks sweet but sadly it was not for me. I prefer the normal or default setting. Not that your setting is not good but maybe I'm just too stuck up with the default.

    I'm still very new to trading and my Ichimoku skills really doesn't count much weight so I called my mentor's student (they are both retired pro Japanese traders) to also do some back testing with your settings and we both agreed on one thing that it wasn't for us. He also said that he instructed two of his traders to back test your setting and again they too got the same result.

    We found out that it was a little bit slow for our liking especially on lower time charts if we follow the signals given by your tenkan and kijun sen but It really didn't bother us because we don't use Ichimoku's signal for entry but use candlestick analysis. We also tried adding some indicators and most of the indies do line up quite well with your setting so maybe the problem is on how the way we trade because we use candlestick analysis for entry and often using candlestick analysis for entry is quite fast and aggressive compared to indicators. But to be fair with you, we also find the default setting a bit slow too compared to candlesticks analysis or naked charting so that's why both default and your setting is an close match... But there are areas where your setting do shine better or are more visually easier to look at compared to the default setting which is often times a pain to look at. Though I use the default setting that I hate it so much because it gives me sore eyes...

    We only looked at a few currency pairs on M5, M15 and H1 so our testing is really very limited and doesn't really mean much. We think that if your setting works well for you then you should continue using it.

    Like you, I'm was also a heavy Ichimoku user but have shifted to fully naked charting. Sometimes we add Ichimoku and some other indies on our charts from time to time for extra confirmation or as a back-up but Ichimoku is still my no.1 favorite especially when I'm having doubts. Please share your future setting and we will try it too. This is just my honest opinion and I hope you'll continue with your experimentation.

    Happy trading

    PS: I found out that most of the pro guys that I know have studied candlestick analysis heavily and use Ichimoku as a guide. Here in Japan, good teachers teach candlestick analysis first before they jump to Ichimoku and maybe this is why most of us ended up using naked charting and Ichimoku as a visual guide. Same with Heikin Ashi, we all started with it but ended up with candlesticks.

  3. #3
    Legendry Member willyw's Avatar
    Quote Originally Posted by Ronnel View Post
    Hi Indicat,

    Very nice thread! I tried your settings and did some back testing and it looks sweet but sadly it was not for me. I prefer the normal or default setting. Not that your setting is not good but maybe I'm just too stuck up with the default.

    I'm still very new to trading and my Ichimoku skills really doesn't count much weight so I called my mentor's student (they are both retired pro Japanese traders) to also do some back testing with your settings and we both agreed on one thing that it wasn't for us. He also said that he instructed two of his traders to back test your setting and again they too got the same result.

    We found out that it was a little bit slow for our liking especially on lower time charts if we follow the signals given by your tenkan and kijun sen but It really didn't bother us because we don't use Ichimoku's signal for entry but use candlestick analysis. We also tried adding some indicators and most of the indies do line up quite well with your setting so maybe the problem is on how the way we trade because we use candlestick analysis for entry and often using candlestick analysis for entry is quite fast and aggressive compared to indicators. But to be fair with you, we also find the default setting a bit slow too compared to candlesticks analysis or naked charting so that's why both default and your setting is an close match... But there are areas where your setting do shine better or are more visually easier to look at compared to the default setting which is often times a pain to look at. Though I use the default setting that I hate it so much because it gives me sore eyes...

    We only looked at a few currency pairs on M5, M15 and H1 so our testing is really very limited and doesn't really mean much. We think that if your setting works well for you then you should continue using it.

    Like you, I'm was also a heavy Ichimoku user but have shifted to fully naked charting. Sometimes we add Ichimoku and some other indies on our charts from time to time for extra confirmation or as a back-up but Ichimoku is still my no.1 favorite especially when I'm having doubts. Please share your future setting and we will try it too. This is just my honest opinion and I hope you'll continue with your experimentation.

    Happy trading

    PS: I found out that most of the pro guys that I know have studied candlestick analysis heavily and use Ichimoku as a guide. Here in Japan, good teachers teach candlestick analysis first before they jump to Ichimoku and maybe this is why most of us ended up using naked charting and Ichimoku as a visual guide. Same with Heikin Ashi, we all started with it but ended up with candlesticks.

    Good job. You are moving up

  4. #4
    Veteran Member Ronnel's Avatar
    Quote Originally Posted by willyw View Post
    Good job. You are moving up
    Many thanks Sensei

  5. #5
    Rookie Member Indicat's Avatar
    Thanks for your post Ronnel, to be honest with you, wat works for me doesn't always have to work for somebody else. The good thing about trading is that it's a personal thing so always stick to a prefered trading style. But always try to look out of the box for improvements, sometimes you have to do one or two steps back to make a leap foreward.

    Success in your trades, Indicat...
    Last edited by Indicat; 11-27-2015 at 07:34 PM.

  6. #6
    Veteran Member Ronnel's Avatar
    Quote Originally Posted by Indicat View Post
    Thanks for your post Ronnel, to be honest with you, wat works for me doesn't always have to work for somebody else. The good thing about trading is that it's a personal thing so always stick to a prefered trading style. But always try to look out of the box for improvements, sometimes you have to do one or two steps back to make a leap foreward.

    Success in your trades, Indicat...
    Hi Indicat,
    Yes you are totally right about what works for you may not work for others but since I'm like you who is open for experimentation, I also try to test other trader's settings in hope that I can gain something from their knowledge or maybe find the holy grail. That is also the reason why I passed your setting to my seniors because they too are very much open to try something new. About Ichimoku, one of my senior who have passed away was one of the many who helped tested it when it was in the making during his younger days but he also did like to play with the setting especially when computers became widely available and so is his student who is now my mentor. And this is also the reason why he instructed his other traders to try your setting because we are all interested to try something new
    Please share your future setting and we will love to try them too.

    About my personal Ichimoku trading strategy, I use the default setting and use it mainly for M1, M5, M15. For M1 I basically ignore the cloud, Kijun Sen and Tenkan sen and only use Chikou Span for overbought and oversold. We also use Chikou Span and the Cloud to plot our trendlines and to calculate Fibonacci and also use it for candle bouncing calculation. Plus I also use finger Fib when I get overwhelmed by the lines. So at lower TF, we go with Chikou Span and candlestick analysis but I do follow the clouds once I'm looking at a higher TF. For short TF I don't totally ignore the Tenkan, Kijun and Senkou Span but use them as a moving S/R or as a moving Fib. So basically I use 3 kinds of charts and I jump from one to another which is Fully Naked, Ichimoku and Heikin Ashi with Bollinger Bands and Rainbow. But the main rule I follow is Candle Engulfing Strategy especially near S/R areas and at Fib turning points. I also don't use higher TF S/R when I'm trading short TF and just follow Chikou Span's pattern for my direction. On higher TF, we often visually calculate the shape, formation and angle of the cloud to predict the candles future formation. Sometimes my mentors asks me to draw the candles probable future formation on a piece of paper basing it on the clouds shape and angles. Sometime I get it right and sometime I don't but these too is a good exercise for learning how and why the Kumo has formed that way. I find this exercise very useful because it makes me imagine or visualize the future candles probable path making it easier for mentally calculating future bounce, reversal and future stops without the extra paper. I find this technique useful for longer TF but it does help to for shorter targets.

    I hope you'll also share your trading style too...

    Happy trading!!!

  7. #7
    Rookie Member Indicat's Avatar
    Hi Ronnel,

    You're lucky to be surounded by people with a lot of trading experience, not many traders have that privilege. My tradingstyle is stil in a learnig curve, but Ichimoku with the fibonacci setting is my new standard (for now).
    I also focus on divergence, the Bollinger Bands %B indicator works well, gives good divergence and is very precise.

    Here is a screenshot with Ichimoku and %B giving divergence.

    http://invst.ly/kh-2

    As you can see, divergence is a powerful tool when used in the right conditions.
    I also noticed that with the fibonacci settings the false crossovers beween Tenkan-Sen and Kijun-Sen are way less than with the default, for example just after 16.00 you'll see that Tenkan-Sen(red) is supported by Kijun-Sen(blue). With the default setting this would be a false cossover, suggesting the beginning of a new down trend.

    I'm also looking on the 15 and 1 hour charts for long flat spots in the Kumo(cloud), these provide excelent support and resistance lines on the 5 and 1 minute charts.

    I do like Bollinger Bands, but in combination with Ichimoku you will mess up your screen giving a line overload, the %B indicator is a good alternative and is almost the same as the Comodity Channel Index which is also a very popular indicator.

    Ok, thats it for meow..

    Cheers, Indicat...
    Last edited by Indicat; 11-28-2015 at 08:16 PM.

  8. #8
    Legendry Member willyw's Avatar
    HI Indicat, learn hard and sont be laszy and you will move up just like Ronnel

  9. Thanks Ronnel thanked this post
  10. #9
    Rookie Member Indicat's Avatar
    Thanks for the encouragement Willy, keeping up with Ronnel can be a daunting task, but I'm trying.

    Have a excellent trading week, Indicat...

  11. #10
    Legendry Member willyw's Avatar
    Quote Originally Posted by Indicat View Post
    Thanks for the encouragement Willy, keeping up with Ronnel can be a daunting task, but I'm trying.

    Have a excellent trading week, Indicat...
    wish u good luck

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
3