Ichimoku Kinkou Hyou (Itchy Mushrooms)

[kennynah]

another tech query...

tenkan cut up kijun = bullish ...so, what about kijun cut up tenkan, oso bullish?

[blid2def]

Basically, using IKH, the key things to look out for are:
1. Signals (any of these systems: price versus Tenkan; price versus Kijun; price versus kumo; Tenkan versus Kijun; Kumo cloud twist)
2. Confirmations (by Chikou Span - basically Chikou Span versus price)

In this post, I'll briefly explain (1) and (2). The details are in the Ichiwiki I posted in the first post to this thread.

For IKH, signals can be generated by any of the methods I listed in (1) above. Let's list them down again here:
(a) price versus Tenkan-sen;
(b) price versus Kijun-sen;
(c) price versus kumo;
(d) Tenkan versus Kijun;
(e) Kumo cloud twist

Okay, (a) and (b) are basically the same thing - price crossing up or down one of the "moving average" lines. The Kijun-sen cross is regarded as the more reliable of the two crosses, being made up of a longer duration than the Tenkan-sen.

(c) is basically also known as a kumo cloud breakout - basically the price action moving up or down, out of the kumo cloud.

(d) is basically the Tenkan-sen crossing up or down the Kijun-sen

(e) - you've to plot the "forward" kumo cloud. Since the cloud is bounded and formed by two lines (Senkou A and B), this kumo twist is the state where these two lines cross (hence, the name "kumo twist", because this is visually represented by the cloud being twisted and changing colour).

I think no brainer lah here - all the crosses from (a) to (d) - cross up = bullish; cross down = bearish. For crossing though, you'd also prefer to see the crossed line in an upward (if bullish) or downward (if bearish) slope.

The kumo twist - Senkou A cross up Senkou B = bullish (cloud usually turns green); Senkou B cross up Senkou A = bearish (cloud usually turns pink).

For confirmations, it's basically looking at the Chikou Span - and seeing if/when it crosses the historical price action, in the same direction of the triggering signal. So, say you have a (1b) cross, where price cuts down the Kijun, you'd look for a confirmation from Chikou Span cutting down the historical price.

ps. Actually another signal method, is to throw everything in (1) away, and just use the confirmation signal itself as the buy/sell signal.

[blid2def]

key role of the Chikou Span is to confirm the signals generated. Basically, a bullish/bearish signal is confirmed if the Chikou Span crosses up or down the price

bro...bullish if chikou pek crosses up what price? current price, u mean?

i got to internalise this part....bcos i share with you why i am having a heck of a problem with this chikou fella.. it is nothing more than a transformation of left 26 periods...in fact, it is a "cut and paste" of current actions and map those onto the same chart but shift that 26 bars(if i use bar charting).... so, how come, just becos it cuts upwards becomes bullish?

but i do recognise the reason for chikou to cut upwards into the cloud or better still, go upwards of cloud to show clear strong bullish strength... obviously, this can happen only becos current price action has gone up up and away for some time...else, technically, this chikou pek cannot exhibit this technically....tio bo?

thanks.

(ps : oh....knn got projection one ah...ok, i better check my settings...and so this one like pearson pivot like dat ah?)

Confirmation if the Chikou cuts up or down the price where it's translated to. That means, you translate the current price 26 periods back (and hence you get the Chikou plotting point) and see what is the position of this plotted point relative to the price back then.

Bro, you are right, the Chikou is absolutely a cut-and-paste job. As for how come it cut upwards means it's bullish... it actually means it confirms a bullish signal given earlier (or at the same time). So for example, if you get a bullish signal from the current price cutting the moving average line (say the Kijun) - at that point, the Chikou may not have cut the price yet (and this phenomenon is very common). Then later, at some point, Chikou finally cuts up (and assuming your signal still valid lah) - this means that the current price action is moving up across (recent) historical price action and also in the direction of the signal you have noticed earlier.

Trading purely with the Chikou is also a signaling method, but I'm not comfortable with that because I've seen lots of false crosses all over.

[kennynah]

thanks GR....some more...hahaha...macam no end hor.. pls bear with me..

tenkan - kijun essentially are EMA9 and EMA26, right? so, if i wana, i can change it the parameters to 50, 200...then magically, these T/K becomes the traditional EMA50/200 respectively...ya ?

u;ve mentioned repeatedly that this itchy kinky is used predominantly by forex traders..perhaps, the 9/26 periods correspond to the need for sensitiveness of price action...but to apply for a more mid term trade, shouldnt we modify this periods?

but this chikou is always 26 periods, right?

ps. Actually another signal method, is to throw everything in (1) away, and just use the confirmation signal itself as the buy/sell signal.
by this, do u mean, that the best signal, is when

a) chikou is above price
b) price is above cloud

this way....for sure, the price is above tenkan and kijun sens..

[blid2def]

another tech query...

tenkan cut up kijun = bullish ...so, what about kijun cut up tenkan, oso bullish?

Hmm Kijun cut up Tenkan... I've actually yet to see this... but I'd say it isn't bullish.

If the Kijun is sloping upwards, a cross can only happen if the Tenkan is (a) sloping up slower (b) is flat or (c) is dipping. In all cases, it'd suggest to me that current price action is no longer trending as strongly as in the past 26 periods, as the Tenkan sen is more reactive to current price action than the Kijun sen.

Interpreted another way, Kijun cutting up Tenkan is akin to the Tenkan sen cutting across/down the Kijun sen (in 2 of the three cases for the Tenkan).

Hmm, theory liao liao... make sense bo? Hahaha.

[kennynah]

another tech query...

tenkan cut up kijun = bullish ...so, what about kijun cut up tenkan, oso bullish?

Hmm Kijun cut up Tenkan... I've actually yet to see this... but I'd say it isn't bullish.

If the Kijun is sloping upwards, a cross can only happen if the Tenkan is (a) sloping up slower (b) is flat or (c) is dipping. In all cases, it'd suggest to me that current price action is no longer trending as strongly as in the past 26 periods, as the Tenkan sen is more reactive to current price action than the Kijun sen.

Interpreted another way, Kijun cutting up Tenkan is akin to the Tenkan sen cutting across/down the Kijun sen (in 2 of the three cases for the Tenkan).

Hmm, theory liao liao... make sense bo? Hahaha.

i understand...u wana see kijun cut up tenkan....open up C daily chart... u see it at fri's closing price...

one reason... last 9 days... price is tight ranged bounded...but overall, the last 9 days' price is encap within an already huge surged before this period ...resulting in this phenomenon...(which is correct....when u see how C peo from 14.50 to 20 in less than 2 weeks in Jul)

[iam802]

one way to look at Chikou is think of it as the 'former high' in classical TA.

eg. price go up but feel to break new high and reverse down.

this should be reflected in chikou as the sharp point.

In classical TA, you would look at these points as support / resistant point.

Does this make sense? (above statements anyhow 'philosphize' )

[kennynah]

ok noted puay kong dee...thanks... but really, i cant see any usefulness of this chikou as a R/Ss since it is easier to see from the traditional price points on chart...

BUT...as mentioned, if Chikou runs into Cloud or even break out of Cloud (up or down), then this could be a usable signal... tio boh, my interpretation... pls confirm

thanks.

[kennynah]

eh bros...it just crossed my mind...

suppose, i just plot the Senkou A&B, maintain my MA50/200 (which i use to replace tenkan and kijun), ignore chikou (cos i can simply see chart points for R/Ss)....then sui liao hor?

ie...i just wana use Senkou A&B to see price relative to 26days ahead projection....eh sai boh?

[blid2def]

tenkan - kijun essentially are EMA9 and EMA26, right? so, if i wana, i can change it the parameters to 50, 200...then magically, these T/K becomes the traditional EMA50/200 respectively...ya ?

Tenkan formula: (Highest High + Lowest Low)/2 for the past 9 periods
Kijun formula: (Highest High + Lowest Low)/2 for the past 26 periods

Eh, so not EMA 9 or 26. Actually when I refer to the T & K lines as "moving averages", I'm actually being lazy and misusing a term, because as you see from the formulae above, they're not really moving averages in the conventional sense. Perhaps I shouldn't use that MA term anymore, but because we're so used to that concept of 2 lines being averages, I lazily borrowed that term.

u;ve mentioned repeatedly that this itchy kinky is used predominantly by forex traders..perhaps, the 9/26 periods correspond to the need for sensitiveness of price action...but to apply for a more mid term trade, shouldnt we modify this periods?

but this chikou is always 26 periods, right?

Yah, from what I understand, Japan forex houses use it. There has been some discussion in the past as well, regarding whether for stocks, the periods should be changed to 7/22. Personally, I'm not at that level of proficiency to say if that makes sense or not. Paiseh, this one can't help.

ps. Actually another signal method, is to throw everything in (1) away, and just use the confirmation signal itself as the buy/sell signal.
by this, do u mean, that the best signal, is when

a) chikou is above price
b) price is above cloud

this way....for sure, the price is above tenkan and kijun sens..

Basically, it means that Chikou cut the price up/down and then u decide where to place your bets. Whether the cut is above, in or below the cloud determines the strength/reliability of the signal (same applies to all other crossovers).

Look at it this way - if price is below cloud, it means that we're in a "bearish phase", with resistances above us. If we trade a bullish crossover (and f**k, I keep doing that hahahaha) under the cloud, it means that we're trying to trade a correction or reversal. Doesn't mean it won't work - it just means that we're betting against the prevailing trend before the cross.

Same applies the other way around.

Will there be a case where there's no Tenkan / Kijun cross, but there's a Chikou cross? Hmm. Possibly. There's also possibilities of a Kijun cross that's opposite in direction to the last Chikou cross (whipsaw situations). So personally, I'm more comfortable with the conventional one signal + one confirmation method.