Trading With Ichimoku Clouds : The Essential Guide to Ichimoko Kinko Hyo Technical Analysis by Manesh Patel
Yes, it’s yet another TA book, but in my defence, this one is a bit different. Actually very different as it doesn’t focus on a complex tapestry of different indicators working together to produce a confused mess - it’s all about one indicator (which itself may be a complex collection of messy ideas) so maybe it will make more sense, and maybe not. Let’s find out!
Introduction
MP shows us this chart and claims Ichimoku would have got us out 1-2 days before the drop.
Yes, it’s yet another TA book, but in my defence, this one is a bit different. Actually very different as it doesn’t focus on a complex tapestry of different indicators working together to produce a confused mess - it’s all about one indicator (which itself may be a complex collection of messy ideas) so maybe it will make more sense, and maybe not. Let’s find out!
Introduction
- Ichimoku Kinko Hyo - a system used in Japan for years but hasn’t gained widespread adoption in the west like candles have, largely thanks to Steve Nison.
- Patel, (MP from now on) blames technology for the volatility in the market at the time of writing
- MP is an engineer and used to overcomplicate things ‘as engineers tend to do’ (do they?)
- Patel believes many companies are falsifying their earnings with creative accounting
- He makes the tired (and terrible) analogy of trading as a hunt for prey
- Without a plan you are simply doing trial and error
- The plan must suit your personality
MP shows us this chart and claims Ichimoku would have got us out 1-2 days before the drop.
- MP outlines a trading plan very similar to all the other ones we’ve seen
- What instruments?
- What time frame?
- Entry rules
- Fundamental PEG, PE, Cash flow
- Technical: Ichimoku, MA, ATR, Fib, Gann, Pivots, VSA
- Money Management: use stops
- Set profit target
- Size positions
- Time entry/exit
- Risk per trade
- Risk per month
- R:R
- Post-trade analysis
- MP claims the word ‘stop loss’ is scary because of the word ‘loss’
- “The most valuable aspect of Ichimoku Kinko Hyo is that it looks for history to repeat itself now and also in the future. Through the Ichimoku charts, you can see past "events" easily and make current decisions based on past events.”
- MP calls Gann ‘one of the most successful traders of all time’ which is highly suspect
History
- Goichi Hasada revealed Ichimoku Kinko Hyu (IKH from now on) in 1948 to Hidenobu Sasaki (notice that it’s always a guru revealing his secrets to a pupil who is also an author)
- We can learn more about the history in a book by Nichole Elliott says MP
- IKH is made up of 5 components
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