Disclaimer: This is not meant as financial advice and is for entertainment purposes only.
When looking at an indicator it is very important to start with the settings. Crypto markets are 24/7/365 and most indicators do not account for this.
Settings
Bitcoin
These settings account for the 24/7 crypto markets and they also double the time frame. For example: if looking at the 1 hour chart then these settings will give you the 2 hour cloud. This will help to minimize false signals.
Alts
Forex
Since these markets do not trade on the weekend it is best to double the default settings:
Bull Trend
Bear Trend
Entry Signals
Checklist
- Price position relative to cloud
- Bullish/Bearish cloud
- TK Cross
- Lagging span relative to price and cloud
Exit Signals
Signals that are counter trend are considered weaker!
Edge to Edge Trades
C-Clamp or TK Disequilibrium
“When the TK lines are spread far apart, this signals price moving quickly in one direction and can be thought of as an overbought/oversold indicator.” @CarpeNoctum
"Will often correct to the Kijun where a bounce can occur”
The Cloud
-Trend is your friend!
-Consider the cloud a no trade zone, unless making an edge to edge trade
-Start with longer time frames and zoom in from there
Lagging Span
Price close for prior 30 days
Some traders use it for confirmation, some disregard entirely.
For bullish entry want to see the lagging span above the price and above the cloud.
Kumo Twist
Flip will occur ahead of time and indicates that tides are turning. Be cautious and on the lookout for an exit. Moku speculates that most traders do not give the Kumo twist enough credit and/or disregard it entirely.
Personal Thoughts
The Ichimoku Cloud seems very useful in predicting support and resistance areas as well as providing reliable entry and exit signals. I am a big fan of moving averages and Ichimoku Clouds take them to the next level. I also believe that equilibrium is very important and think that the "C-Clamp" will be a very useful indication of overbought/oversold markets.
Sources:
Intro to Ichimoku Cloud
The Cloud
Lagging Span
Kumo Twist
Trading Tips and Tricks
Trading Bitcoin with Tone Vays and Crypto-Core
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