(as of Dec 04,2021 18:58:10 UTC – Details)
From the Publisher
1. BITCOIN—Buy signal according to the Cloud Breakout Strategy
Bitcoin Buy signal
The Ichimoku System includes five indicators represented by curves. The system makes it possible to define entry points and exit points of a financial market. These points are determined by alerts. The combination of two alerts and more, represents a signal to be considered by the investor. A buy or sell signal has three power levels: weak, normal, or strong. All indicators of the Ichimoku system appear in a single window. The green and red zones represent the Cloud (Ichimoku Cloud). The Cloud is projected 26 periods into the future and reflects the market equilibrium zone. The Cloud represents a:
• support zone when the close is located above.
• resistance zone when the close is below.
To understand the use of the different strategies, let’s use the Bitcoin crypto currency. The first figure shows a strong buy signal from the Cloud Breakout Strategy. The signal is generated on October 19, 2020 (the green circle). According to the summary table of the Cloud Breakout Strategy in the Ichimoku Charting & Technical Analysis book, the Close/Cloud crossover meets the following three conditions:
1. Base Line indicator (red) is on the rise
2. The future Cloud is green
3. The Lagging Span is located above the Cloud of the 26th previous period.
The signal is strong bullishas the Lagging Span indicator is located above the Cloud. The Cloud Breakout Strategy is one of the five strategies presented in this book.
2. BITCOIN—Sell signal according to the Base Line Cross Strategy
Bitcoin Sell signal
The second figure shows Bitcoin’s meteoric rise from the October 2020 buy signal until April 2021. The dotted lines are the support zones and correspond to the plateaus created by the Cloud. Bitcoin close can bounce on these lines if the market goes down. We note that the close of Bitcoin remains above the green cloud. This confirms the strength of the trend. From mid-April, the chart shows signs of a reversal. A sell signal is generated in April 2020. According to the summary table of the Base Line Cross strategy in the Ichimoku Charting & Technical Analysis book, the Close/Base Line crossing respects the two conditions, all met inside the red square:
1. The Close/Base Line crossing takes place above the Cloud.
2. Optional condition: Base Line indicator (red) is on the rise.
The signal is weak bearish, as the Close/Base Line cross is above the Cloud.
Other elements deserve our attention. The blue circle represents a false signal. The close tested the base of the Cloud and made a rise on the same day. This situation is common because the base of the Cloud acts as a support area. Furthermore, notice the Cloud on the far right. It seems to be preparing a crossing: the Cloud could change from green to red.
3. BITCOIN—Sell signal according to the Cloud Breakout Strategy
Bitcoin Sell signal
The third figure shows a sell signal from the Cloud Breakout Strategy in May 2021. This is the second sell signal generated by the Ichimoku System since the April 2021 high. Dashed lines are the support zones and correspond to the plateaus created by the Cloud. Bitcoin close could rebound on these lines if the market goes down.
According to the summary table of the Cloud Breakout Strategy in the Ichimoku Charting & Technical Analysis book, the configuration meets the following three conditions:
1. The Base Line indicator (red) is bullish.
2. The color of the future Cloud is red.
3. The Lagging Span indicator (dark green) is located in the Cloud.
The signal is neutral in strength because the Lagging Span indicator is located in the Cloud.
4. BITCOIN—Buy signal according to the strategy Conversion Line/Base Line Cross
Bitcoin Buy signal
The fourth figure shows the behavior of Bitcoin in the summer of 2021. Following the sell signal generated in May 2021, Bitcoin continued to fall below the 30,000 level to rebound in the middle of July. A buy signal is generated on July 30 with the crossing of the Conversion Line/Base Line indicators. The Conversion Line (blue line) goes above the Base Line (red line). According to the summary table of the Conversion Line/BaseLine Crossing Strategy in the book Ichimoku Charting & Technical Analysis, the configuration meets the following three conditions:
1. The Conversion Line/Base Line crossing is inside the Cloud.
2. The close is above the cloud.
3. The Lagging Span indicator is above the close of the 26th previous period.
The configuration offers an optional fourth condition; the Cloud turns green. The signal is neutral in strength because the Lagging Span indicator is located in the Cloud.
There are other Ichimoku strategies for generating buy and sell signals. It is possible to trigger the signals faster by changing the settings of the Ichimoku system. The Ichimoku is an effective trend-following system and the Cloud remains the nerve center. Combining the Ichimoku System with other classic indicators adds even more quality to the entry and exit points of financial markets.
Publisher : Tripod Solutions inc. (November 16, 2019)
Language : English
Paperback : 141 pages
ISBN-10 : 1989118399
ISBN-13 : 978-1989118399
Item Weight : 9.9 ounces
Dimensions : 6.69 x 0.34 x 9.61 inches