As mentioned in Introduction to Tracking Price Action, the 3 Pass Process was a training tool for reading the entire Ichimoku Kinkō Hyō system. Learning the 3 Pass Process for the individual lines was akin to training wheels for reading the system. We are now going to take off those training wheels and ride away.
To reiterate, now that we know the components of the system the order we view is:
5. Chikou Span
Price to Everything
Most Recent Candlesticks
How big or small is the last candlestick?
Is it above or below the one before?
Is it inside or outside the range of the second to last candlestick?
Is it a reversal candle like a Doji, engulfing, hammer, piercing, or harami?
Is it a bullish reversal like a Three Line Strike, Abandoned Baby, or Morning Star?
Is it a bearish reversal like a Three Line Strike, Three Black Crows, or Evening Star?
Is it a bullish continuation like an Upside Tasuki Gap?
Is it a bearish continuation like a Hammer Inverted, Matching Low, Two Black Gapping, or Breakaway?
Is the most recent price action going up, down, or in a consolidation range? (End Trend)
Is the most recent price action gappy?
Where is the most recent high? Where is the most recent low?
Are there more high peaks or more low peaks?
Are the high peaks getting higher and higher or lower and lower?
Are the low peaks getting lower and lower or higher and higher?
Short-term trend – Tenkan-sen to Kijun-sen – how long and often bullish vs. bearish?
Medium-term trend – Price to Kijun-sen – how long and often bullish vs. bearish?
Long-term trend – Price to Cloud – how long going up, inside, going down?
Price Action to Kumo
Is the current price above, inside, or below the Cloud?
Is it touching or bouncing off one of the Senkou Spans?
Is the current price moving in the same direction as the angles of the Senkou Spans?
When was the last time it rode, touched, bounced, or crossed Senkou Span A?
When was the last time it rode, touched, bounced, or crossed Senkou Span B?
What happened the last time the price passed through the Cloud? Was it a thick or thin Cloud?
When the price passes through the Cloud, how close is it to Kumo Twists?
Did it pass through quickly or did it get caught inside for some time?
Did the price have a hard time exiting the Cloud?
Once it exited did it take off or did it hug a Senkou Span?
Does price behave differently for a Span A over B vs. B over A? (Green Cloud vs. Red Cloud)
Price Action to Kijun-sen
Is the current price above, below, or touching?
Is the current price moving in the same direction as the angle of the Kijun-sen?
When was the last time it rode, touched, bounced, or crossed?
How often does it touch and break through? How often does it touch and not break through?
Recently, does the price tend to stay above or below?
How long does price action tend to run above or below before turning?
Can you see a correlation between price and the Kijun-sen for when the Kijun-sen is above, inside, or below the Cloud?
Price Action to Tenkan-sen
Ask the same questions as Price Action to Kijun-sen.
Is there a pattern for price action to Tenkan-sen when the Tenkan-sen is above or below the Kijun-sen?
Price Action to Chikou Span
Looking at price action closest to the current Chikou Span is the Chikou Span above, below, or inside the 26-period old price action?
What happened the last time the Chikou Span moved up and touched old market action?
What happened the last time Chikou Span moved down and touched old market action?
Does it get stuck? Does it break through easily? Does it bounce off and reverse?
Price Action to the Cloud Lines, Kijun-sen, and Tenkan-sen
Is it currently riding along a line?
Is it above or below the line it’s currently riding?
How long is the current ride?
Which side of the line has price action been on the most lately?
Is it mainly riding on the top or bottom of this line?
Which line(s) does the price ride the most?
Does it mainly ride above or below those lines?
How long or short are the rides?
When was the last time price touched a line? What did it do? Does it have a habit of doing this?
How close does the price action get to the lines?
How often does price action touch a line?
What does it do after it touches?
Are there more touches before the end of a trend?
What happened the last time price crossed a line?
Did it keep touching or move away from the line?
After it touches how often does it cross?
What happens after it crosses? Does it stay on the other side or cross back?
Does crossing back and forth many times crate a consolidation range?
Questions for the Lines
Is the Main Trend up, down, or flat? Is the End Trend up, down, or flat?
How often do the angles change?
How steep are the angles and how long do they run?
How long are the plateaus?
How long are the runs between plateaus?
Is the current Cloud (at most recent price action) bullish (A above B) or bearish (B above A)?
How thick is the current Cloud?
Where in the past Cloud is the last Kumo Twist?
When, where, and how long are the plateaus for Senkou Span A and Senkou Span B?
Do any plateaus match other support/resistance zones?
Is the future Cloud thick or thin?
Is it getting thicker or thinner?
How many twists are there?
Is the future Cloud bullish (A above B) or bearish (B above A)?
What is the angle on the Kijun-sen?
How long has the current angle been in place?
How long was the longest angle on the chart?
Are there greater angles when going up or down?
How long do they go when angled up?
How long do they go when angled down?
How often does the line go up versus how often it goes down?
When, where, and how long are the plateaus?
Is Kijun-sen above or below Senkou Span A?
Is Kijun-sen above or below Senkou Span B?
Ask the same questions as the Kijun-sen.
Is Tenkan-sen above or below Kijun-sen?
How often do they cross?
How long does the Tenkan-sen stay on one side or the other of the Kijun-sen?
Is there a channel between the Tenkan-sen and Kijun-sen and how long has it been in place?
How often do the lines run together?
Is Chikou Span above, below, or inside past price action?
Is Chikou Span above or below the Tenkan-sen?
Is Chikou Span above or below the Kijun-sen?
Is Chikou Span above or below Senkou Span A?
Is Chikou Span above or below Senkou Span B?
Imagine a cone of possibility in front of the Chikou Span, what is next in support/resistance?
Asking these questions gives us an understanding of the current price action and Ichimoku system configurations. This information can help us make buying or selling decisions.
You’ll notice that you can answer most of these questions by just glancing at the chart. Isn’t it amazing how much information you now get from just one glance at the chart? You’re becoming a master of Ichimoku.