Ichimoku abort criteria

Hello everyone, I just started trading live a few weeks ago, and so far I'm up 10% on my initial deposit, with 10 wins and 2 losses using the ichimoku system. I only trade when I have a full bearish or bullish signal on a 1H time frame, I also make sure that the 4h/1D Price is above the cloud, and that on a 15m the Tenkan, and Kijun are crossed in the trend that I am taking. Like I said the results have been great, usually taking about 50 pits per win. I use a trailing stop loss, so initially the stoploss is below the Kijun line, but then as I move up into profit I move to breakeven and then follow up until the trend stops me out. I like to think my entry strategy is sound.

However one issue I have been experiencing lately, and was curious what other ichimoku traders are doing, is defining my Abort strategy. See the two losses I have occured, have been with a full signal, I took a position, and then the price stalled right after the lagging line broke the past price (I.E. not sideways). When this occurs what do some of you traders do to determine if this signal was false, and that you should exit before you reach your stoploss? or do you just let the stoploss take you out?

I would love to hear the insights of other ichimoku traders on this subject, Thank you!

When you think your entry is no longer valid, exit the trade ... No regrets ... You will have plenty other opportunities ...

FerruFx,

Thank you for your reply! I was thinking that was the case, what I was trying to ask though is how do you "define" if your entry is no longer valid? For instance when you say that, I'm assuming you mean since I wait for a full signal from all parts of the ichimuko, I would invalidate an entry when one of my signals wasn't confirming the entry, and then I would exit the trade? For instance if price closed below my Tenkan? or the lagging line went inside of price?

I apologize if I'm over thinking, I just want to fully understand your thoughts.

Thank you!

If the price goes in a area where you wouldn't open a trade in that direction, that should be time for an exit.

Thank you for the clarification, I figured that's what you were saying, but I wanted to be sure.

I would love to hear from any other experienced ichimuko traders, always love learning from those more experienced than me, below is my basic strategy if anyone else would like to discuss or comment on it.

Brilliant explanation right here.

Not sure if it's brilliant ... At least it is logical!

It sounds like it is, from what you say, and your results to date seem to bear that out (albeit on a small sample-size) to a high degree of statistical significance.

But I'm not 100% clear on exactly what you're describing, when you say ...


What exactly do you mean by "full bearish or bullish signal"?

For example, if there's a Tenkan/Kijun upward cross below the kumo, or in the kumo, when the price is above the kumo and rising, do you consider that a "full bullish signal"? Some Ichimoku traders do; others don't because they take Tenkan/Kijun crosses only when the cross itself is also on the same side of the kumo as the price.


In my opinion, you need to have one policy and stick to it, and that's what matters.

It matters less what the policy is, because you can be certain that if you have two different exit policies, there are going to be some times when one will turn out to be better than the other, and other times when the exact opposite occurs. Don't try to be right all the time: that's not going to happen.

Personally I regard trading as being primarily about avoiding risk rather than about maximizing profit, so I err on the side of exiting early, knowing that I can always re-enter later. I'm well aware that (in this forum, in particular) not everyone shares this perspective.


I'm going to offer you two suggestions, then ...

1. Have a look at the effect of trailing your stop manually, as the trade progresses, 1-2 pips beyond the level of the Kijun 3 bars/candles earlier. It's not bad. Sometimes it's very good; sometimes it's less good. Overall, it can work well, and it's simple. (It sounds like you'd be adjusting your stop-loss hourly, but this turns out not to be the case, often, of course, because the Kijun is sometimes flat).

2. Look at different Ichimoku settings. Be aware that the original settings were applicable to trading stocks from daily charts, and are also based on 6 trading days per week in Japan, from when they still traded on Saturdays. Clearly, there's absolutely no reason why these should necessarily be the most appropriate settings for one-hour currency charts! I'd suggest that 5-20-40 may work well on H1 forex charts (and that together with the full 5-20-40 Ichimoku settings, adding an additional set of "kumo only" with longer settings like 5-40-40 may add something helpful). A shorter setting like 6-18-36 or even 5-15-30 may also be worth looking at .

I'm among the growing band of forex Ichimoku traders (when I use it at all, that is: mostly I trade price action only, without indicators) who leaves the Chikou Span off the chart altogether, myself: it tells me nothing that I can't see at a glance without it.

Anyway, if you trade H1 or slower charts consistently using Ichimoku, with patience, discipline and judgement, and with good money-management and appropriately conservative position-sizing, you're more likely to make overall profits than overall losses. Good luck.

Its great mind map of the strategy