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Peaches`s trading log

  • #1
  • First Post: May 17, 2009 12:10pm May 17, 2009 12:10pm
This trading journal has the purpose, to be a log for my trades based on
this trading idea.

I like to put parts of 2 trading system together to identify
areas of price exhaustion and trend reversal points. Also I want to spot
areas of support and resistance.

The trading idea is based on 2 well known trading systems:

1) The Tom Demark Sequential and
2) the Ichimoku Kinkou-hyou trading system.

Basic -especially at the turning points- is the knowledge about candlestick pattern.

Short intro to TD sequential:

The TD sequential is based on 9 consecutive closes less than the close 4 candles ago (for a downtrend) and 9 consecutive closes higher than the close 4 candles ago (for an uptrend).

After 9 days price will reach a zone, where is no interest to climb higher (or lower). It will go sideways or turn. If trend is very strong it will go more then 9 days.

To keep in mind, the direction of 9 consecutive closes are the directon of the trend.

There is a second part of the system in the Tom Demark universe, which is called "Countdown". For further information I recommend threads here on FF, or TD book: "The New Science of Technical Analysis", 1994.

Chart 1: TD Sequential

Short intro to Ichimoku Kinkou-hyou:

The ichimoku system is a complex trading system where the traders are able to trade different styles (kumo breakout, kijun sen cross, chikou span cross etc.). The entry system is, most time based on moving average crossing (which is not importend for me atm.)

What I take from the system are only the areas of support and resistance.

The Ichimoku is like a painting, where a lot of things work good together to give a good trade. For details I recommend to read everything here on FF about ichimoku, because there is no book available in english atm.

Chart 2: Ichimoku Kinkou-hyou
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  • #2
  • May 17, 2009 12:14pm May 17, 2009 12:14pm
Now lets have a look how those 2 systems work together:

First we spot a TD buy sequence on eur/usd:

On the eur/usd we have 9 consecutive closes less than the close 4 candles ago. Price has reached an area of exhaustion, it turns. We keep in mind, the main trend is UP. But price turned to find support somewhere...

Here comes ichimoku system into play: It gives 3 areas of support and resistance:

First support is the kijun sen (the blue line). A full daily close below the blue line (a break of the kijun sen) would indicate a broken resistance.

Second support is the upper part of the ichimoku cloud.

Third area of support is the lower part of the ichimoku cloud.

We watch, how daily candle looks like at these 3 areas of support.
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  • #3
  • May 17, 2009 1:39pm May 17, 2009 1:39pm
Thanx brother for sharing..

I like the idea of making 2systems work togather .. i will stick here to learn something new.
Never sell @ lower upward channel unless breacked and vise versa .
  • #4
  • May 18, 2009 2:25pm May 18, 2009 2:25pm
Quoting WedWed
Thanx brother for sharing..

I like the idea of making 2systems work togather .. i will stick here to learn something new.
Hi wedwed, you are welcome

I exit my eur/usd after close the 4 h candle I marked. This trade was a winner. Close was coincident, because I am not able to sit at the computer 24 h a day. At this 4 h close I was.

But from daily perspective: Price was not able to break the red line, which is the tenkan sen. Tenkan sen also is a resistance in the ichimoku charting system, but not that good, like the blue line (kijun sen). This is because the red line is build of faster moving average.

I`am not convinced, that the down move is over, I will watch the 4 h candle around 1.36,f or next short, which has the 4 h kijun sen plus the 61.8 fibo retrace level. If these levels are broken to the upside....we have a true bull run

I`am not in a position yet.
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  • #5
  • May 18, 2009 2:44pm May 18, 2009 2:44pm
Next TD sequence is in daily UJ:

We have a TD sell setup sequence. This means, after 9 days of price falling, price is in a zone of exhaustion. With coincident, this happens at the lower part of the ichimoku cloud, which is resistance in the ichimoku system.

So will go sideways or turn up, before turn down again at a resistance to resum main down trend.

Lets see.
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  • #6
  • May 18, 2009 2:54pm May 18, 2009 2:54pm
Next sell setup was on eur/aud, but it is developed further:

We see TD sell sequence and retrace until the kijun sen (blue line).

Now price dropped more.
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  • #7
  • May 21, 2009 12:41pm May 21, 2009 12:41pm
I went short after 4 h bearish candle I marked, and was stopped out soon,
because my SL was above the 4h candle pair.

I reversed my position, because I saw the bounce from ichimoku cloud plus kijun sen (blue line).

I catched the nice move til 1,39 where I exited my trade manually.

There is nice resictance above this area (1.39-1.40). In ichimoku trading the chinkou span (the green line) in the past gives area of support and resistance. I marked some in the past.

The weekly shows us the cloud above, so this gives us resistance too.




Quoting peaches
Hi wedwed, you are welcome

I exit my eur/usd after close the 4 h candle I marked. This trade was a winner. Close was coincident, because I am not able to sit at the computer 24 h a day. At this 4 h close I was.

But from daily perspective: Price was not able to break the red line, which is the tenkan sen. Tenkan sen also is a resistance in the ichimoku charting system, but not that good, like the blue line (kijun sen). This is because the red line is build of faster moving average.

I`am not convinced, that the down move is over, I will...
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  • #8
  • May 21, 2009 12:51pm May 21, 2009 12:51pm
my eur/aud short was stopped out, but I went short again, because
the tenkan sen (the red line) might give us support now. Close SL.
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  • #9
  • May 21, 2009 12:56pm May 21, 2009 12:56pm
The aud/jpy managed to close daily above the kijun sen on tuesday and closed daily above the tenkan san. A break and a daily close above or below
those two lines are indicating further development of trend.

Today we see fight to try to close above the tenkan sen (red line). If it breaks, bears a in favor.

I`am bullish on this pair.
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  • #10
  • May 21, 2009 12:57pm May 21, 2009 12:57pm
The tenkan seen also gives support for G/J today. I see G/J 152.5 next.
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  • #11
  • May 21, 2009 1:07pm May 21, 2009 1:07pm
In ichimoku trading, on trading style is based on the crosing of the red line.

If the red line crosses the blue line, this is a buy signal.

We see on eur/cad a buy signal.
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  • #12
  • May 24, 2009 11:01am May 24, 2009 11:01am
Quoting peaches
In ichimoku trading, on trading style is based on the crosing of the red line.

If the red line crosses the blue line, this is a buy signal.

We see on eur/cad a buy signal.
If the red line crosses the blue line, this is a buy signal.

We see on eur/cad a buy signal.[/quote]

Looks like I was too early with entering the long eur/cad trade, because the price was rejected from the kijun sen (blue line).

This is Ok, because in ichimoku trading, one strategie is to trade a kijun sen break. This means a full body candle close above the kijun sen. Lesson learned.
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  • #13
  • May 24, 2009 11:11am May 24, 2009 11:11am
Quoting peaches
my eur/aud short was stopped out, but I went short again, because
the tenkan sen (the red line) might give us support now. Close SL.
My SL was taken and I reversed my position for a long. This is based most on the candlestick pattern on the weekly. The weekly shows us current weekly candle with long lower wick. This is indicating buying pressure.

The daily has closed above the red tenkan sen line, which is a bullish indication in my eyes.
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  • #14
  • May 24, 2009 11:20am May 24, 2009 11:20am
Quoting peaches
The aud/jpy managed to close daily above the kijun sen on tuesday and closed daily above the tenkan san. A break and a daily close above or below
those two lines are indicating further development of trend.

Today we see fight to try to close above the tenkan sen (red line). If it breaks, bears a in favor.

I`am bullish on this pair.
A full bullish close above the tenkan sen. Confirmation for bullish trend.

The weekly shows us the cloud above as a resistance.

BUT, we have the chinkou span (green line) is crossing through the price. This is another alternativ of ichimoku trading: If the chinkou span is crossing the price, trade in the direction of the chinkou span.
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  • #15
  • May 24, 2009 11:31am May 24, 2009 11:31am
I exited my eur/usd long at 1.39, of course too early

But if we look at the weekly chart, price is insice the ichimoku cloud.

Inside the ichimoku cloud is a no-trade-area in ichimoku system.

Price has broken resistance of the lower part of the weely cloud, but there is significant resistance above. The weekly upper part of the cloud, and the green chinkou span has build resistance at an area of 1.4180 and 1.4260. I wait a good entry short, which might appear soon.
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  • #16
  • May 24, 2009 11:39am May 24, 2009 11:39am
Another trading opportunity is to trade a break through the
ichomoku cloud. Trade in the direction of the break of the cloud, but time your entry.

If price is above the cloud, price is in bull land. If price s below the cloud, price is in bear land.

I went long at the time, we have a daily bullish close above the tenkan sen, and exit last friday.

I wait now, price might return to test the ichimoku cloud one or two time to proof resistance. If price is rejected it is a "save" long trade....
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  • #17
  • May 24, 2009 11:45am May 24, 2009 11:45am
geppy weekly form point of view ichimoku system:

the price has tested the red tenkan sen line two times, and the green chinkou span is breaking through the price.

Next weekly resistance is at ~158, which is given by the green chinkou span in the past and of course by the cloud.
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  • #18
  • May 24, 2009 2:41pm May 24, 2009 2:41pm
Another alternative for trading ichimoku system is to trade the change in the color of the ichimoku cloud.

Example here is the eur/lfx. This is the euro light index, a kind of USD-Index, but just for the euro.

This is just to have an example. I highlighted the change in color of the cloud, and direction of the price development.

You can also see a full daily candle close above tenkan sen (red line), plus we have seen a golden cross (crossing of tenkan sen (red) and kijun sen (blue)).

Oh, I forgot: the chinkou span (green line) is crossing the price, this is also indication of bullish price development.

You see "ichimoku" is a picture with a lot of details, all together give the painting.
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  • #19
  • May 25, 2009 5:13am May 25, 2009 5:13am
Hi Peter Just noticed you started this thread
I wish you every success with it ....

I know a little about TD trading as it was one of the first strategies pointed out to me and I really like it tho not really practiced it much since I took up candlesticks.
I know nothing about the Cloud so complete newbie here.Anyway Ill defiantly tag along for the learning experience and some free trades

Tony
On-site guru & also FF member's' psychiatrist, when not drinking tea
  • #20
  • May 25, 2009 11:07am May 25, 2009 11:07am
Quoting Bones
Hi Peter Just noticed you started this thread
I wish you every success with it ....

I know a little about TD trading as it was one of the first strategies pointed out to me and I really like it tho not really practiced it much since I took up candlesticks.
I know nothing about the Cloud so complete newbie here.Anyway Ill defiantly tag along for the learning experience and some free trades

Tony

Hi tony, nice to see you here.

What I`am missing in candlestick trading, is a more clear way to say where support and resistance is. I always have problems with this. I remember ichimoku-system, which I was trading 2 years ago, which is pretty good in support and resistance. I few charts, to compare pure candlestick, and ichimoku trading:
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