Module 1 – How to Track Price Action on Ichimoku Charts
Module 2 – Finding Support and Resistance
Module 3 – Reading the Charts

Reading Charts Module 2 Review

You now know that looking at longer-term time frames can help you understand what is going on in the time frame you trade in. If you trade the daily charts, seeing what is going on in the weekly can help. A corollary was presented using the weather analogy.

Daily – Current Weather
Weekly – Seasons
Monthly – Climate

The same holds if you are using shorter time frames. If you are a day trader using 5-minute charts, then looking at the 15-minute chart would be the seasons to your 5-minute “current weather,” and looking at a 1-hour chart would be like your climate.

The main point is to take a look at longer time frames to get ideas of the longer-term trends that are in place.

Speaking of trends, many believe that a chart is bullish if the current price is above the 200-period simple moving average. This indicator is tracked by many so it can become a self-fulfilling prophecy. It works well with Ichimoku and is easy to see on charts.

Fibonacci Retracements also work well with Ichimoku. When the Fibonacci lines correspond with Ichimoku plateaus they reinforce each other. These areas or zones should be watched carefully.

I find it easier to draw Fibonacci Retracements on longer time frames so I usually use weekly or monthly charts to look for the highs and lows. However, you don’t want to go back too far or we start to lose market memory. Our goal is to find areas of pain or excitement of other traders to determine if there might be selling or buying going on in a price zone.

Fibonacci Retracements are subjective, different people could draw them from different places so they aren’t as important, in my opinion, as Ichimoku lines.

Both Fibonacci Retracements and the 200-period simple moving average can show support and resistance zones that the Ichimoku does not.

Side Quests From This Module

Side Quest: 200 Day Moving Average: What it is and How it Works
Richard Snow. July 29, 2019. 200 Day Moving Average: What it is and How it Works.

Side Quest: What Are Fibonacci Retracements and Fibonacci Ratios?
Casey Murphy. April 22, 2020. What Are Fibonacci Retracements and Fibonacci Ratios? Investopedia.

Side Quest: Fib Retracement Help Center.

Side Quest: School of Pipsology Fibonacci Trading
September 2, 2018. Fibonacci Trading.