Basic ichimoku kinko hyo forex strategy

This is one of the most simple ichimoku forex strategy out there, that works. It is perfect for getting to know inner workings on ichimoku indicator. It is also provided with free expert advisor that will allow you to test your ideas and different calculation periods of indicator components.

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The system was tested for profitability on historical data since 2003. It is based on complex and quite complicated indicator – Ichimoku kinko hyo. The signal remains simple – candle with big enough size confirming trend momentum. A

 

Advanced trailing stop is also used.

 

Used forex tools indicators

Ichimoku kinko hyo(90,260,520). Chinkou span is omitted from the calculation.

 

Advanced trailing stop (extra deviation for trail stop 40 pips): Trailed after each candle close. It is placed below the low/ above the high of a candle depending o the trade direction. Additional distance can be applied.

 

Big candle signal (body width 40 -150 pips): Simple entry signal. We will be looking for big enough candle suggesting market momentum in the direction of trend. We define minimum and maximum size of the candle as min/max in the EA inputs.

 

Forex strategy rules

For the best results, trade with professional ECN/STP broker with MT4. If you can't trade with profit. Automatically copy the traders that are already profitable.

 

SELL

The upper cloud edge, consisting of span B and span A line is above the price.

Span B is above the span A.

 

Kijun sen (blue line) trends above tenkan sen (red line).

This position of the indicator relative to the price confirms the downtrend.

 

We start looking for a bearish candle with minimum range of 40 pips. We enter the trade short on its close.

Trailing stop is placed 30 pips above the high of signal candle. TS will be the only method of closing our trade.

 

BUY

The bottom cloud edge of ichimoku, consisting of span B and span A line is below the price.

Span B is below the span A.

 

Kijun sen (blue line) trends below tenkan sen (red line).

This position of the indicator relative to the price confirms the uptrend.

 

We start looking for a bullish candle with minimum range of 40 pips. We enter the trade long on its close.

Trailing stop is placed 30 pips below the low of signal candle. TS will be the only method of closing our trade.

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Disclaimer:  Expert advisor was tested for profitability on historical data. All screen shots provided are displaying real results of the test. However past data will never guarantee future success. Every expert advisor needs to be tested properly on demo account. LIVE use only on your own risk. Read full disclaimer. TheForexKings Team does not give any financial advice. TheForexKings does not take any responsibility for any user’s investments and investment decisions. All rights reserved. Strictly for personal use.

 

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