Yes, most traders mainly use Ichimoku on a daily chart. However, a weekly chart will also provide support and resistance levels. The monthly chart starts to be too long to be helpful on a daily basis.
Shorter time frames are often used by swing and day traders. Some traders use Ichimoku on the tick level.
If a chart is thinly traded, has lower volume, Ichimoku starts to loose it’s effectiveness on shorter time frames like 1, 5, and 15 minute charts.
We go over this in more detail in Course 04 – Finding Trades – How to Find Stock Trades using Ichimoku Kinkō Hyō – Chasing Tornadoes, Module 1, Lesson: Using Ichimoku on Shorter Time Frames to Find Clues to Trading.
You can take Module 1 as a free preview which includes this lesson. If you determine the rest of the course would be beneficial then you can choose to purchase the rest of the course.
You can change them. Many traders change them to reflect our current trading week which is different from when Ichimoku was developed. Others change them to match 24/7 markets.
However, there are several caveats.
1. If you make the numbers lower, you may create more signals which could lead to more false signals.
2. If you make them longer, you may reduce the number of signals and miss out on some trades.
3. If most people are using the default numbers, you’ll be seeing something different from others and one of the purposes is to see what other traders are seeing.
4. Many seasoned Ichimoku traders leave the numbers on the default after testing other sets of numbers.
5. If you are new to trading, trying to form fit the numbers for a particular issue could be time that could be better used elsewhere. I would suggest that if you are new to trading that you use the default numbers until you are more comfortable with trading.
6. There are many technical papers on Ichimoku and in all of them they always use the default numbers. (that I have seen)
This issue is discussed in Course 02 – Learn Ichimoku – Learn How the Ichimoku Kinkō Hyō Cloud System Works – Stock Weather, Module 5 – The Kumo Cloud – What is Ichimoku’s Cloud Indicator?, Lesson: Kumo Formulas for the Lines the Senkou Span A and B.
I go into more detail in this lesson including the most used changed numbers.
Hi, I’m William. The shaded Kumo on the charts was already called the Cloud. I made up other meteorology terms to describe other parts of the system. It started one day when I was daydreaming and thinking about a chart formation and I started talking about it like it was on a weather map.
Tenkan-sen (blue line) – the winds (changes quickly)
Kijun-sen (red line) – the Jet Stream (more steady)
Kumo – the Cloud
Price Action – I like to say that price action is like a hot air balloon with buyers turning up the heat making the balloon go up and sellers turning down the heat making the balloon go down.
Chikou Span is plotted 26 periods behind price action so I call that the “shadow” of the balloon.
Daily – Current Weather
Weekly – Seasons
Monthly – Climate
I look at the weekly for the seasons and decided that when market action is below the Cloud it’s Winter. Moving into a red Cloud is Spring, above the Cloud is Summer, and inside a green Cloud is Fall.
I like to use a 200-period simple moving average with Ichimoku and I call that the “chase vehicle.” It’s always trying to catch up with the hot air balloon of market price.
Strategy is the big picture part of your Trading Plan. Your strategy includes what you trade and your time frame.
Tactics are the techniques you use to buy and sell. Your tactics include if, how, and where you place stops and the decisions to enter trades.
This is talked about in more detail in Course 01 – Trading Mistakes – Don’t Let Your Mind Trick You Into Making These Trading Mistakes, Module 1 – Trading Mistakes, Lesson: Pre-Trade – 31 Strategy and 29 Tactic Mistakes. This lesson is available as a free preview.
You can review Module 1 as a free preview to see if you like my teaching style.
I read through dozens of articles and forums where traders listed the mistakes they made and I kept a database of the answers.
The top 10 most commented mistakes that traders made are:
- Following tips from others and then not confirming idea by doing your own research (Listening to Others)
- Not having a plan (Trade Plan or Tactics)
- Not controlling emotions, letting fear, egoism, vanity, or greed get in the way of trading (Psychology)
- No stop loss or exit strategy, not cutting losses, not being prepared for losses (Using Stops, Managing Expectations)
- Not being prepared (this falls into many categories including Strategy, Tactics, and Risk Management)
- Failure to do research (Researching)
- Using leverage or margin or using too much (Risk Management)
- Overtrading, trading too frequently (Trade Management)
- Day Trading (Strategy)
- Lack of Diversification (Money Management)
Dozens of other mistakes are listed then used as the basis for creating a Trading Plan in Course 01 – Trading Mistakes – Don’t Let Your Mind Trick You Into Making These Trading Mistakes.
This is just my personal opinion but for me it’s the Kumo Breakout. It is a tactic within my personal Trading Plan. I focus on it a bit in my courses.
Kumo Breakouts are discussed in Course 04 – Finding Trades – How to Find Stock Trades using Ichimoku Kinkō Hyō – Chasing Tornadoes, Module 2 – Finding Trade Signals and Creating Strategies, Lesson: Find Trading Strategies Based on Ichimoku.
There is also an entire course based on the Kumo Breakout. In Course 07 – Kumo Breakouts – Step by Step Kumo Breakout Walkthrough – Finding Rainbows, I paper trade 12 different Kumo Breakouts while you follow along. You get to see how I would enter, move up stops, mark up the charts, take profits, and manage these trades.
In the Introduction to Course 08 – Social Analysis – Why Invest in a Company That Has Unhappy Employees – Playing Outside, I write the following about Social Analysis.
Social Analysis is using other data and social information to investigate companies.
Social Analysis can be
- watching the information a company makes public
- see which information the public re-tweets or comments on
- monitoring the social channels of a company
- researching what employees and ex-employees are saying about the company
- how many people work at the company
- reviewing the increase or decrease of a companies website and social media popularity
- reading blog posts by officials at a company
- seeing which social issues a company rallies around
- reading a companies press releases
I read a magazine article on Ichimoku in 2007 and I’ve been using it ever since. It’s been my go to technical analysis indicator system for over 15 years. I’ve looked at thousands and thousands of Ichimoku charts.
You too can see over a thousand charts. In Course 06 – Sector Rotation – How to Use Ichimoku to Find Sector Rotation – Climate Cycles, we look at nine sectors, once a month for 10 years. That’s over a thousand charts in just this one course. My hope is that after taking this course, you’ll be able to use Ichimoku to see money flowing in and out of the different sectors. And by looking and analyzing this many charts, you’ll also be increasing your knowledge of Ichimoku.
Goichi Hosada started working on Ichimoku Kinko Hyo in the late 1920’s through the early 1930s in Japan. He kept it private until the 1960s when he published articles about it in 1969.
In 1996 Hibenobu Sasaki publishes a book with the technique.
Nicole Elliot popularized the system in the west and published Ichimoku Charts: An introduction to Ichimoku Kinko Clouds in the UK in 2007.
She also contributes an Ichimoku chapter to a technical analysis book that was published in the United States in 2007.
Ichimoku is easy to program so most modern trading programs include the indicator.
You can read more about the times and history of Ichimoku on the History Stories page.