Eur/Usd « OptionSlam Blog

04/21/2010

Ichimoku System Trigger 2: Divergence

Filed under: Optionslam Technical Analysis — Tags: Eur/Usd, Gbp/Usd, Ichimoku — g3song @ 12:17 am

This is the a different setup on the same Ichimoku template.

Simply put, in Ichimoku system, when Kijun-sen is over Tenkan-sen, it is supposed to be short. But what about price breaking up and cross Kijun-sen line?

That’s what I call divergence in Ichimoku.

Set up check list:

1. Divergence: Kijun-sen line and Tekan-sen line and price action shows opposite direction.

2. Price break Kijun-sen: Price going up and 4h bar has confirmed breaking Kijun-sen line.

3. Kijun-sen then become support. (This is the most important bar in this system). We need to make sure Kijun-sen line then become a support and continue to show the price movement trend.

Stop Loss: If a reverse candle confirmed to re-break the Kijun-sen line, we cut loss.

Take Profit: Use pivot or MA lines to take profit. Lock free trades as usual.

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04/20/2010

Ichimoku System Trigger System 1: attack the second wave

Filed under: Optionslam Technical Analysis — Tags: 4h, Eur/Usd, Gbp/Usd, Ichimoku — g3song @ 10:13 pm

I like Ichimoku system template. At least it gives me a peaceful and colorful screen.

Kijun-sen Line is calculated based on (HIGHEST HIGH + LOWEST LOW)/2 for the past 26 periods.

I can see it to represent a nice 50% fib line on 4h or 1h chart. (Yes, it is a cheat but I try to keep it simply/lazy so I don’t have to draw it myself. )

However, default triggers from Kijun-sen systems are many times too late. I have combined the fib-line system with Ichimoku Chart and comes up with my own triggers.

This blog will introduce set #1: Attack the second wave

Check list for the entry based on 4h chart only:

1. Tenkan has already crossed Kijun to confirm the trend.

2. Price has trended beyond Tenkan and retrace back to test Kijun.

3. Price has confirmed to have Kijun Support.

Use Kijun-sen as s/l, we enter the trade to attack the second wave.

See following chart for example,

In this chart 4 hour Gbp/Usd, there are there check signs to represent each of the conditions of this trigger.

Note 1: In this chart, there is also a hidden purple dotted line, which is the Gann Indicator. It’s important to monitor that indicator and make sure it didn’t flip to against our trade too close to the Kijun-sen line.

Note 2: Make sure the previous high/low on the same chart do not show MACD divergence.

Note 3: In my trading, I would prefer to have the support of Gann or Ma cross in 4h chart to confirm the bounce.

Here is another example,