教学

Ichimoku Cloud Indicator Masterclass

Ichimoku Cloud
Ichimoku Cloud is a set of technical Indicators that show support and resistance levels, momentum as well as trend direction which is done by taking into consideration multiple averages and plotting them over the chart.

It is composed of 5 lines, 2 of which compose a cloud where the difference between the two lines is shaded in where the price may find support or resistance.
The 5 lines include,

a 9-period average (conversion line),
26-period average (baseline),
an average of those 9-period and 26-period averages (Leading Span A),
a 52-period average (Leading Span B) and
a lagging closing price line (Lagging Span)

There are different ways to interprate the Indicator:

Ichimoku Cloud
The cloud is the most prominent feature of the Ichimoku Cloud plots. The leading Span A moves faster than the Leading Span B as Leading Span A, the average of conversion line (9-period average), and base line (26-period average) while Leading Span B, 52-period average making the shorter moving average more sensitive and faster than longer moving averages.
The price is above the cloud indicates an uptrend and it is strengthened when the Leading Span A is moving above and rising from Leading Span B, similar for downtrend.
Ichimoku Crossover
For the crossover strategy there will be use of Conversion Line (9-period moving average) and Base Line (26-period moving average). The crossover line takes lesser data points into consideration and reacts to the price more quickly while the baseline considers more data points tending it away from the market price thereby making the reactions slower.
Therefore, for Ichimoku crossover a buy signal is generated when the conversion line moves above the base line and sell when the conversion line drops back below the base line.
Price-Baseline Trend
As the price moves down below the Base Line representing a short-term oversold situation within a bigger uptrend with the pull back ending when the price moved back above the Base Line to trigger Bullish signal while as the price moves above the Base Line representing a short-term overbought region within a bigger downtrend with the bounce ending when the price moved back below the Base Line trigger to a Bearish signal.
Ichimoku + RSI
The Oscillator indicator is RSI and the moving average is Ichimoku in which we’ll be using RSI to give signal i.e. the signal chart while Ichimoku will provide with the trend i.e. the trend chart.
Buy when Leading Span A is above Leading Span B, and the value of RSI crosses up 30 and sell when Leading Span A is below Leading Span B along with the value of RSI crosses below 70.

Few Limitations of Ichimoku Cloud

Can make chart complex and distracting
There are few points plotted in future which might go in vain
May become irrelevant for long period of time as price remains way above or way below the cloud
Different signals from different elements making it a bit confusing

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- Mudrex