The following text below is taken from the slides of Using Ichimoku Indicator with Elliottwave Chart Seminar recording.
Trend Identification and Confirmation
- Most important aspect is the Cloud and Chikou Span
- BULLISH market = price and chikou span trade above cloud
- BEARISH market = price and chikou span trade below cloud
- When price is inside the cloud, the trend is neutral
- When price breaks above / below the cloud, it could indicate a change in trend in that particular time frame
- It’s useful to confirm trend and also filter trading signal
Buy Trading Signal
- Both price and chikou span lie above cloud in 4 hour chart
- Price starts to decline but still above cloud and future cloud is bullish
- EWF 1 hour Elliottwave chart is showing that pullback should end at blue box inflection area which should either be above or ideally around the cloud area
- Buy the pullback in the blue box area as the 1 hour EWF Elliottwave chart is showing
- As far as price quickly bounces from the cloud and does not close below the cloud, the long trade is safe
- Exit the trade when price closes below cloud. Even better, use EWF trading technique for stop and target
Sell Trading Signal
- Both price and chikou span lie below 4 hour cloud
- Price starts to rally but still below the cloud and future cloud is bearish
- EWF 1 hour Elliottwave chart is showing rallies should end at blue box inflection area which should either be below or ideally around cloud area
- Sell the rally in the blue box area as the EWF 1 hour Elliottwave chart is showing
- As far as price quickly pullback from the cloud and does not close above the cloud, the short trade is safe
- Exit the trade when price closes above cloud. Even better, use EWF trading technique for stop and target
Using Ichimoku Indicator with Elliottwave Chart Seminar Recording
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