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| Ichimoku Multiple TimeFrame Confirmation|
USA: NY, Baldwinsville
I have been playing "in the cloud" for the last day or two and it is not necessarily a fun place to be.
I tried to construct a simple strategy using David Linton's "Cloud Charts Trading success with the Ichimoku technique" as a guide.
The idea is simple.
An instrument is considered "bullish" if the price is above the cloud and the lagging span indicator is simultaneously above the cloud. One exits any Long position when these conditions are violated.
An instrument is considered "bearish" if the price is below the cloud and the lagging span indicator is simultaneously below the cloud. One covers any Short position when these conditions are violated.
Assuming we had suitable signals we would then examine multiple time frames for confirmation. Since I am a day/swing trader the time frames Mr. Linton suggested were daily, 60-minute, 5-minute and 1-minute. When all the stars are in alignment we should have a pretty good trading candidate. Or, so the theory goes.
Now, unfortunately, working with the Nirvana-supplied Ichimoku Keywords is not as straightforward as one would like and so I had to create my own Leading Span A and Leading Span B indicator (whose plotting I verified on the price chart to conform to Nirvana's). We need this indicator to use in the construction of our Stop and Strategy.
Putting it all together I have supplied the complete package below. It includes the System, Stop, Indicator, Strategy, and Chart Template. Unfortunately the Profile was larger than the 800 KB allowed and so I had to .zipx it, but then it was not an allowed postable file type. So, you will just have to make your own.
The results look like the screen shot below. For Monday, December 16, 2013 one might be contemplating long positions on AAP, ADBE, ILMN, NUS and TW. Short considerations include ANF, EMN, IBM, LGF, PSA, and SHLD.
Mr. Linton provides some other strategies in his book which if I deem worthy I might also try to implement in the future.
(Multiple Time Frame Confirmation.PNG)
Edited by ThomasHelget 12/14/2013 3:14 PM
Multiple Time Frame Confirmation.PNG (221KB - 9 downloads)
Bullish and Bearish Ichimoku.otd (132KB - 12 downloads)
SpanAorB.txt (0KB - 18 downloads)
StopBullAndBearIchimoku.txt (0KB - 15 downloads)
BullishAndBearishIchimoku.txt (0KB - 18 downloads)
Bullish And Bearish Ichimoku.ots (772KB - 12 downloads)
USA: NY, Baldwinsville
After re-reading and re-reading again and squinting at Mr. Linton's small charts, I decided to make a change in what I originally offered.
Remember we are not after a trading strategy per se here, we just want to know if an instrument is in a bullish or a bearish mode.
So, to that end we will use Mr. Linton's definition - an instrument is bullish if price is above Span B and bearish if price is below Span B. Further confirmation of a bullish instrument might be had utilizing the lagging line. According to Mr. Linton, "The lagging line will nearly always cross the cloud after the price has and it is the true confirming signal that the trend has changed."
Below please find a new System, Stop and Strategy that implements these ideas. We will consider the instrument a buy when the price is above Span B and the lagging line is above the cloud and we will consider the instrument a sell when the price is below Span B and the lagging line is below the cloud. We will exit a trade on the price cross of the Span B line.
Remember the idea with multiple time frame analysis is simply to find those instruments in gear in all the time frames viewed.
(TIF with New System and Stop.PNG)
Edited by ThomasHelget 12/16/2013 11:48 AM
Bullish And Bearish Ichimoku.ots (772KB - 13 downloads)
sysBullishAndBearishIchimoku.txt (0KB - 14 downloads)
stoBullishAndBearishIchimoku.txt (0KB - 13 downloads)
TIF with New System and Stop.PNG (217KB - 4 downloads)
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