Kumo Breakout failure.

Here I am trading what I thought was a good kumo breakout strategy. I opened the trade in the previous candle because it opened above the cloud. What I should have done is probably let it close above the cloud higher. Instead I got a red candle, which tells me it's heading back to the cloud.

In a place I am learning from, the teacher also took this trade but added this:

[took trade at] top of Kumo but I am using Kijun as SL and will jump to Tenkan once market retraces and moves again

My stop was the ATR/2. I suppose he would still be in the trade but at a negative position at this point. The question is: do you want to be in the trade all the pips down it goes? Or do you want to reenter without pips loss? I do not know if I would re-enter the trade while the price is in the cloud.

Update: The KBO did occur, however I did not catch it. I should have reentered but hindsight is 20/20

Trades over the weekend

I had some great success last week catching USD/JPY plunge with news from the Bank of Japan. I caught the downtrend which lasted for a while. I thought the trend might continue over into next week.

However I was wrong.

The downtrend soon ended after a little hesitation and I was stopped out. I still managed to get some profit from this event, but I did have higher earnings at some point.

What I did right:

I waited a while to see how the next 4 hour candle would turn out, and then see how the 2nd candle open. Read a news article predicting more drop in the price.

What I did wrong:
Did not realize the steam ran out after the weekend, price reversed on me.

Lesson:
The weekend can reset trading thinking.

Ichimoku System for Trading on Forex

I am currently a new trader learning to trade with the Ichimoku system. Ichimoku means 'one glance', and it's a set of moving averages to provide instant information about a chart's history and direction it will head.

Concepts in Ichimoku:



Kijun sen - ( Highest High + Lowest Low of last 26 periods ) / 2  [GREEN LINE]

Tenkan sen - (Highest High + Lowest Low of last 9 periods ) / 2  [RED LINE]

Senkou A  -  (Kijun + Tenkan ) / 2  projected 52 periods forward  [WHITE LINE]

Senkou B -  ( Highest High + Lowest Low of Last 52 ) / 2 projected 52 periods forward [YELLOW LINE ]

Kumo - Cloud area shaded between Senkou A and Senkou B.

Chikou Span - The current price 26 periods behind. [PURPLE LINE]


Sentiments:
BULLISH when : Tenkan sen on top of Kijun sen
Cloud setup with Senkou B below Senkou A

BEARISH when: Kijun sen on top of Tenkan sen


Trading Triggers: Price breakout of the cloud. [Kumo Breakout]. Trade signals when Kumo Breakout when price exits the Cloud above for a long or below for a short.
Tenkan sen Kijun sen cross over is a trading signal. Weak when under a bullish cloud. Neutral in the cloud. Strong above a bullish cloud. If bearish crossover, strong under the bearish cloud and weak above a bearish cloud. Neutral in all cloud setups.
Chikou span signal: above price for bullish, below price for bearish. Touching a candlestick makes a neutral signal.