How to Trade Forex with Ichimoku: The Core System

We have come a long way learning about ichimoku. In this article about the indicator, I will teach you how to trade forex using ichimoku to anticipate, ride, and profit with the trend.

Ichimoku is a trend following system. Because of that, it only make sense to use it and learn it for trend following. I’m not saying that its all the ichimoku indicator could do. It is just the first step to getting to know this indicator. You can use ichimoku on any kind of strategy you want on any timeframe and on any market. I have been using ichimoku as a contrarian trader and not as a trend trader. But all traders new to this indicator should first learn how to trade with ichimoku with trend following. That is my beginning. That should be yours too.

The First Step – Anticipation

The first step to using ichimoku lies in the fact that you should be able to anticipate if a new trend is going to rise. We want the big trends. And we should be able to get on it before it even begins. We want these trends to last for days, months if possible. So how do we anticipate it?

From our last post about the lines, we use the tenkan sen, kijun sen and chikou lines to anticipate a trend.

Consider this graph:ichimoku

If the 3 lines agree that the trend is going bearish, there is a high chance that a reversal is near. When the kijun sen and tenkan sen lines cross, it means a reversal. If after the cross, the tenkan sen is below the kijun sen, it is bearish. Otherwise, it is bullish. Both kijun and tenkan also points down. Which means its strongly bearish. Now, look at our chikou line. Is it above or below the price action? If its below, then it is bearish. Is it below the cloud or above the cloud? If below the cloud, then it is STRONGLY bearish.

In summary:

  • Tenkan sen below kijun – bearish
  • Chikou below price action – bearish
  • Tenkan sen pointing down – bearish
  • Kijun sen pointing down – bearish
  • Chikou below kumo cloud – strongly bearish
  • Kumo cloud – price action inside – consolidate (chance of breakout if the price goes down and exit the cloud. Chance of trend continuing up if the price exits the cloud upward).

When all the lines agree. There’s a high probability that the trend will go on that direction.

And as anticipated, the lines did prove to be accurate:

ichimoku-crossFollowing the indicator, you could have made profit around 300 – 500 pip for one position alone or more if you keep on adding position as the trend go down. The trend went for months going bearish. You could have also anticipated the trend reversing using the same technique you used entering the trade.

This is the first step in using the ichimoku indicator for trend following. On our next lesson, I’ll teach you how you can use the indicator to add position as the trend unfolds.

Now that you know how to anticipate a trend. Go practice it! Create a demo account or a live account from our list of forex brokers and social trading site. Practice makes perfect. There is no shortcut to success.

How to Trade Forex with Ichimoku: The Cloud

kumo_cloudHowdy! Forex traders. It’s me again! Though I have been quiet lately, I know that I still have a lot of guides to create for you. I have been busy with life lately, and my positions on the market has been for the longer term (daily, weekly and monthly positions) so I decided not to post about my forex trades until I finished this another guide for ichimoku. But enough about me and lets talk more about the ichimoku indicator.

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How to Trade Forex with Ichimoku: Introduction


Ichimoku Kinko Hyo or Ichimoku for short, is a trend following indicator that has been created by a Japanese named Goichi Hosoda. He made a book about the indicator in 1968. But since the lack of translation to other languages, very few traders knew of its existence and for a long time, it has been treated as one of those “exotic” indicators that never really given the time to shine. Just until recently that this indicator proved to be very powerful.

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How To Trade Forex with Ichimoku Part 1

There are lots of ways to trade forex. And I have tried most of the indicators out there. Some of them work, some of them don’t. Some did work, but I’m not particularly comfortable using. And thru the years, I came to settle down with candlesticks and ichimoku.

Ichimoku or short for Ichimoku Kinko Hyo is a japanese indicator that tries to complement where the candlesticks left of. When using candlesticks, it tells us the story what happened during the trading day, but there’s something lacking when you look at the charts as a whole. Where are the support? Where are the resistances? Where is the trend going? Is it going strong or weak? What is the future of the trend? Ichimoku as its name implies, is a “one glance” indicator. When looking at it once, you’ll immediately know where are the important levels are.

In ichimoku, you will know where the resistance and support are. The Japanese who made the indicator believed that support and resistances are not flat lines. They vary wherever the price goes. It can be strong or weak, as indicated by a big or small cloud. And with ichimoku, you’ll also have an idea of the “future” with its future kumo cloud.

If all these things sounds confusing to you at first, bear with me. During the course of the following weeks, I’ll teach you how you could harness the power of this great indicator and hopefully share to you my knowledge on how to use them. You will know why I started to love this indicator.

So without further ado, I welcome you to the “How to Trade Forex with Ichimoku” series.