Ichimoku system.pdf

Short, medium and long term SZCZUPAK SYSTEM

In a nutshell:

ÐYou canÓt kill a mosquito with a hammerÑ

Short, medium and long term trading in forex need different toolsÈ

Requirements:

1. VT Î it is very precise; avoid MT for this system.

2. Ichimoku Î colours are TS blue, KS red, CS violet, SSA brown, SSA; set parameters to 7,22,44

3. DMS Î use 14 (default)

4. CCI (14) Î (should be default)

The system is based on 4 main instruments:

1. Ichimoku Î for medium and long term investment (forex is always short term but itÓs a matter of

proportions)

2. Dms Î for short term; more frequently used while trading

3. Mountain Trip Method Î a CCI (14) method (used to confirm positions while insecure)

4. EMA 100 Î used to see significant changes Î look for ÐremorseÑ + ADX to confirm the trend is on (not

the direction)

Ad. 1

Chart: 1 hr

Use standard colours used in VT. Ichimoku must be interpreted like:

http://www.fx-strategy.com/a30.asp

http://www.prosticks.com/education/ikh.php

You must use wider SL and SP trading medium or long term with this method

Ad. 2

Chart: 30 min

Use DMS as described in moneytec:

http://www.moneytec.com/forums/showthread.php?s=&threadid=4795&perpage=8&pagenumber=1

But remember not to trade if ADX is under 20 or 25 (depends how comfortable you are) as it is non

trending movement;

The basic Directional Movement trading system involves comparing the 14-day +DI ("Directional

Indicator") and the 14-day -DI. This can be done by plotting the two indicators on top of each other or by

subtracting the +DI from the -DI. Wilder suggests buying when the +DI rises above the -DI and selling

when the +DI falls below the -DI.

Ad.3

Chart: 1 hr

Confirmation (partial Î as you must also check ADX)

Use a CCI (14); The CCI typically oscillates between 100. To use the CCI as an overbought/oversold

indicator, readings above +100 imply an overbought condition (and a pending price correction) while

readings below -100 imply an oversold condition (and a pending rally).

Mountain Trip method is a little bit more complicated; I will write about in the nearest future.

Ad. 4

Chart: 1 hr

EMA 100 Î pay attention to bouncing off this moving average; it had bot psychological and technical

significance. (usually you donÓt have to bother too much)

Chart: 30 min (the same chart of DMS)

This indicator promotes searching of tendency force. If ADX raises, it means that the market tendency

becomes stronger. At such times, it is desirable to conclude the bargains only in the direction of the

tendency. When ADX falls, it means that the tendency is questionable.

The meaning of the directional analysis is in the fact that it traces changes in mass optimism and

pessimism.

Attached Images

Using the system

I've been asked by a forex company set in Germany to sell this system for 4000$ but i refused to as i

believe in solidarity among traders and i prefer not to make money at all costs... by the way you can't be

greedy in forex... it's a pleasure to share systems... this one really works (look at charts if you don't

believe me or ask some of my firends on chat) but i don't want to charge you with any money for it...

i'm a student studying economics and if you are willing to contribute to my TA and macroeconomic studies

feel free to contact me.. my e-mail address is ddmaca@poczta.fm I'm not looking for big bucks but only

small sums (20-30$) to buy books and contribute to the development of a much more educated forex

community... i alredy have 3 persons who contributed and they are happy as the can be assisted

personally at given hours... they show me charts on trades they did in the past to comment on and we set

regualr online meetings to trade together sticking to the system... if you want to contribute contact me by

e-mail. Thanks

Attached Images

xtsunami

22-05-2003, 19:26

Ichimoku charts were developed by a Japanese newspaper reporter. The charts are popular because

at one glance you can see the price action and trend. By the way, ichimoku means one glance.

There are five parts to the charts:

1.standard line

2.turning line

3.delayed line

4. first span

5. second span

(forgive me for not using the Japanese terms)

the standard line is a calculation of the highest high+lowest low/2 over 26 periods.

the turning line is the same calc. high high+lowest low/2 but over 9 periods

these are plotted on a chart like a moving average.

the first span is the turning line+standard line/2 with the results displaced forward by 26 periods

the second span is the highest high+lowest low/2 over the past 52 periods and displaced forward 26

periods.

the delayed line is the closing price 26 periods behind the current period.

I am sure you are wondering by now how you use them to trade, so here you go:

1. when the turning line crosses the standard line from below, go long, if it crosses the standard line

from above go short.

2. if the price action is above the span lines it is an up trend, if below a down trend.

3. the span lines create support (in up trend) and resistance points (in down trend). if price moves

through the "cloud" ( the space between the two spans) from the bottom go long, if from above go

short.

as an example:

the daily imichoku for the Euro/$ shows an uptrend with support at 1.0797. Entry for a trade would

have been placed at 1.0912 on

4.17.03 with a break of the cloud to the upside.

OK, hope this helps if I didn't confuse you too much in the verbage.

xtsunami

Chinkou span- the delay line

Tenkan sen- turning line

Kijun sen- standard

Senkou span A- span 1

Senkou span B span

Ichimoku Kinko Hyo

Characteristic: Support & Resistance Indicator

Parameter Defaults: ST Period 26 controls the measurement period for the Kijun Sen

TL Period 9

controls the measurement period for the Tenkan Sen

DL Period 52

controls the measurement period for the Senkou Span

Plots:

Kijun Sen

(Base Line)

Tenkan Sen (Conversion Line)

Chikou Span (Lagging Span)

Span 1 Senkou Span (Leading Span 1)

Senkou Span 2 (Leading Span2)

The term ÐIchimokuÑ can be translated from Japanese as Ðinstant viewÓ or Ðone glanceÑ, ÐKinkoÑ is the

equivalent of ÐequilibriumÑ or ÐbalanceÑ and ÐHyoÑ means ÐchartÑ. Hence the full name ÐIchimoku Kinko HyoÑ

actually means Ðone glance cloud chartÑ or more appropriately ÐInstant view of the balance chartÑ. Goichi

Hosoda developed Ichimoku Kinko Hyo in the early Showa era (1926-1989) and copyright is owned by

Kabushiki Kaisha Hendou Souken. However, Hosoda, a Japanese newspaper writer, only published his

findings in 1969 and from that point forward Ichimoku Kinko Hyo has become a permanent feature in Japanese

trading rooms.

The series of lines are very similar to moving averages and are based upon high and low prices. The two

Senkou Span (leading) lines are pushed forward in time to represent past support and resistance Î similar in

concept to the idea that once established, support will continue to provide support until broken when it

becomes resistance. The area between the two Senkou Span lines is shaded to make it look like a cloud. This

ÐcloudÑ not only defines the trend but acts as support and resistance for price. A very basic precept is: if price is

above the cloud then the trend is higher and vice versa.

However, the relative positions of the Kijun Sen and Tenkan Sen are also important. (ÐSenÑ is the same word

that is used in ÐShinkansenÑ Î the Japanese Bullet train Î having the meaning ÐlineÑ) Broadly, a crossing of the

Tenkan Sen above the Kijun Sen is bullish and a crossing of the Tenkan Sen below the Kijun Sen is bearish.

To the positions of price against the cloud and the crossing of the Tenkan Sen and Kijun Sen the relative

position of todayÓs price against that of 26 periods prior determines the strength of the signals. The Chikou

Span (lagging span) is todayÓs price moved back 26 periods. If the Chikou Span (todayÓs price) is below that of

26 periods ago and a sell signal occurs, it is a stronger signal than had it been above the close of 26 periods

ago. Equally the opposite is true for buy signals.

The chart above is of the daily USDCHF market during the long US Dollar decline starting in March 2002. The

Tenkan Sen crossed below the Kijun Sen while price was still above the cloud but with the Chikou Span being

below price of 26 periods ago. It was a weak sell signal. However, subsequently price declined below the cloud

and then rallied into the middle of the cloud which provided resistance. The following move lower again caused

both Tenkan and Kijun Sen to move lower with the Chikou Span being well below the price of 26 periods ago.

This added to the bearishness of price.

Later, when the Tenkan Sen crossed above the Kijun Sen the Chikou Span was not clearly above the price of

26 periods prior and provided only a weak buy signal. Indeed, price moved sideways for some time.

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