How Ichimoku Shows Head and Shoulder

Following is a 5 minute chart on the /ES for June 16.

This is one of the reason why I like Ichimoku so much.

We can easily spot the head and shoulder by looking at the Chikou Span on the left and trade off it as it breaks support.

Noticed how it breaks and went down from the neckline.

By iam802

Trend trading with Ichimoku

4 replies on “How Ichimoku Shows Head and Shoulder”

Hi, a’im from Indonesia. I always see your site and i want to ask you. How to use Ichimoku for swing trading or short term…?TQ

Hi Hari,

That is a very good question.

Swing play as we know does not necessary turn into trend.

With this in mind, we can safely ignored the use of the Kijun sen (trendline) in the chart analysis. But, if the swing does turn into trend, we may as well hold for as long as it allows.

1. Using Daily Chart
One way I do it is to use both candlesticks and the Tenkan sen. A reversal pattern on the candlesticks couple will be a good signal to enter.

Upon entry, I will prefer to see the price level cut across the Tenkan sen. Hopefully, the Tenkan sen can hold it for a few days before the price cuts back across the Tenkan sen.

I will probably do a separate post on this and supplement it with some case studies.

2. Using Hourly Chart
The other way to do it is to use the lower timeframe charts like the hourly chart. And if a trend is confirmed on the lower timeframe (eg. hourly chart), we can use it as an entry for the swing play.

The same rules applies for the exit. If we use hourly chart to enter, we should use the hourly chart to exit.

I hope to hear from fellow readers if the above make sense.

Personally, I have not been doing lots of swing trading. I am either looking for the big trend or doing intradays.

And which one the best osct for Ichimoku, RSI or Stochastics to determine entry and exit points?

Hi Hari,

I don’t think it is about which oscillator is best for Ichimoku.

Indicators track the underlying instrument (eg stock, index etc). Hence, the focus should be which oscillator works better with stock XYZ?

There is no clear cut answer for the question. The other point to note for oscillator is that they works well when the underlying instrument is pretty much range bound. But, if you have a more volatile environment, the oscillator may not be a good indication.

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