5 Principles of Ichimoku
I can’t remember where I have gotten these Ichimoku notes.
It was in my little black book for trading. I will be glad to acknowledge the source if anyone can point me in the right direction.
1. If price traverse the Kijun sen, this gives the indication of a directional change.
Kijun sen is the trendline in Ichimoku. A price that cuts through the trendline will indicate a possible change in trend.
2. If price travel too far from Kijun sen
-├é┬ásuggest overbought or oversold
- look for consolidation and/or correction
3. If the Chikou Span traverses price, this is an advance indication that direction may be changing
- start looking for the key level
Chikou Span ‘slamming’ into the price levels suggest resistance or support.
Observe the price action to get a feel if it will break.
4. If price travel too far from Kijun sen on the chart
-├é┬álook at the chart directly in front of it (chart of different timeframe)
-├é┬áhave a stop in place to take profit
5. A realistic stop is determined by placing the stop at a level where if traversed, it has neglected the prevailing sentiment.