ICHIMOKU CLOUD Trading Strategy – KUMO BREAKOUT – Part 2 ??


– [Instructor]
Welcome to the video on Ichimoku Cloud
Trading Strategy. In this series, we
will be learning about Ichimoku Kinko Hyo
Indicator and application of same across
various time frames. Today’s video is about
Kumo Breakout Strategy and its application
across various time frames and asset classes. So let’s get started. So the Convention tickets for VWAP Trading
are already sold out for Bengaluru and Mumbai. I am extremely thankful to all
of you that all the tickets were sold within 12
hours of announcing this on the Telegram channel. Registration for the online
module is still open. This is the same training
which will be delivered over a webinar format and
details of this training is given in the comment section and in the
description box below. In this training, I am going
to give out complete guidelines on how to become a
Successful Day Trader and Short-Term Trader
with VWAP Indicator. So do check out the same. So let us now get back to
Ichimoku Trading Strategy video. Before moving to Kumo
breakout trading strategy, let us first look
into Kumo Twist. If you have not watched part one of Ichimoku Cloud
Trading Strategy, then do watch that part as well as I have
explained basics and some advanced concepts. Link to part one will
come up at top right end of your screen. Now we all know that Kumo
cloud is formed with Senkou A and Senkou B. When Senkou A is above Senkou B, Kumo cloud indicates bullishness and I have marked the
same here in green color. When Senkou A is below Senkou B, Trend is considered as bearish and I have marked the same
in the red color here. So Kumo Twist happens
when Trend changes from Bullish to Bearish and
from Bearish to Bullish again. If you look at this instance,
Kumo twist occurs here where trend changes
from bullish to bearish. A few sessions later, again
if you see trend changes from bearish to bullish so this particular
point that you see is Kumo twist happening
on the bullish side and this particular
point that you see is Kumo twist happening
on the bearish side. I hope this aspect is clear. Do note here that Ichimoku
Cloud is a lagging indicator and it basically gives
you the direction of trend and therefore this is not
a good timing indicator. But with various components
of Ichimoku clouds, you can minimize drawdowns and
improve your odds of success. This is something we will be
exploring in slides ahead. So let me now cover the
basic foundation rules for Kumo Breakout Strategy. There are two main
conditions which need to be fulfilled for along trade. Number one, price should
clearly be above the Kumo Cloud and number two both Senkou A and Senkou B
should be heading higher. Take a look at the
chart in front of you. At this point, price is
clearly above the Kumo cloud but this does not
qualify as a valid trade. The main reason here
is that Senkou A and B are flat and they
are not rising. This same reasoning
applies in this region and the one that
I’ve marked here. If you look at this section, price here is above
the Ichimoku cloud but trend is still bearish and hence this does
not qualify as a trade. Let us now come to this
particular section. When price was above
the Ichimoku cloud in this region, both Senkou
A and Senkou B were flat. A valid long trade
does not come about until this point where both
Senkou A and B start rising. Now many traders would feel
that they are missing out on this move here but this is how
Ichimoku clouds work and this is the main reasons
these are so effective. Ichimoku cloud
would only get you to participate when odds
of success are high. And hence it is imperative
that you understand this about Ichimoku clouds. When it comes to
short sell trades, price should be
below Ichimoku Cloud and both Senkou A and Senkou
B should be heading lower. At this point, price is clearly
below the Ichimoku cloud but Kumo twist happens
at this region. Therefore there is no
short sell trade available in this particular region here. Now, as you gain more
experience with this method, you can begin short
selling at this region and at this particular
region here. If you’re beginning to
trade with Ichimoku Clouds, you should prefer short selling
at this particular point where the Kumo
twist has happened and Senkou A and Senkou B
are clearly heading lower. Now that you have
understood the basic rules of Kumo Breakout Strategy, let me now explain
rules with respect to Tenkan, Kijun and Chikou. Do not here that all components
of Ichimoku are vital, as you need to focus on high
probability setups only. Under the confirmation
rule, you need to watch for price position with respect
to Tenkan, Kijun and Chikou. For a valid long setup,
Chikou has to be above price and this should be
checked at all times. In all these cases
where price made attempt to move above Ichimoku cloud, Chikou was clearly below price. So let us now come to
Tenkan and Kijun. Tenkan and Kijun basically
need to trend as well. If Tenkan and Kijun are flat,
then avoid taking the trade. In this chart in front of you, look at this period where Tenkan and Kijun are clearly
trending higher. Tenkan is marked in blue whereas
Kijun are marked in brown. Do note here that
trending Tenkan and Kijun represent
strong trend in the market and hence you should be focusing on such trending periods only. In previous instances, if you
see as price was attempting to move above Ichimoku cloud, look at how Tenkan
and Kijun were flat. There was no trending structure
that was visible here. I hope now you can see
how combination of Tenkan, Kijun and Chikou prevented
you from taking a long and short trade in
these particular region. This in my opinion, remains
one of the main advantages of using Ichimoku
Trading Strategy. So let me now explain the key
things you should focus upon while trading this Ichimoku
Cloud Trading Strategy. The first element to
consider is whether price is coming out of a range or
is having a V-shaped pattern. If price is forming
a V structure, then reduce your
position size as trading such patterns is
always difficult. Now if price is forming a
range and is consolidating, then this setup
should be focused upon as this is more
rewarding for a trader. The second element to
focus upon is direction of Senkou A and Senkou B. Both Senkou A and Senkou B
should be clearly trending. It does not matter whether
the trend is up or down, the main condition is
that Senkou A and Senkou B should be clearly trending. The third element to focus
upon is Tenkan, Kijun and Chikou with
respect to price. Both Tenkan and Kijun
should be trending and Chikou should be clearly
above or below price. Now this depends whether
you’re taking a long trade or a short trade. The ideal scenario to
execute a trade would be when all components
of Ichimoku Cloud, such as the same things in
terms of direction of trend. In this chart,
Senkou A and Senkou B are clearly trending lower. Look at Tenkan
and look at Kijun, both Tenkan and Kijun
are clearly heading lower over a period of time and do take a note
of Chikou as well. In most of the instances,
Chikou is clearly below price. So I hope you can now see
what you need to focus upon and how you have to avoid
such phases in the market. This chart that you see is something you
will see more often and this is where
Ichimoku Indicator is so useful in a
trading strategy. In the Kumo Strategy, we
are waiting for all elements to align in the
direction of trend and if you look at this chart, there is no trade
visible despite instances where price moves above and
below the Ichimoku Cloud. Based on other
trading strategies, you might get entry opportunity
into this instrument, but based on Ichimoku
Trading Strategy, you would be sitting on
the sidelines waiting for entry opportunities
to show up. Do recollect that market trends
only 30 to 35% of the time and it consolidates
for nearly 65% of time. This means, as a trader you
need to sit on sidelines and trade only when
right conditions show up. I hope you can see how
effective Kumo Breakout strategy is in terms of limiting whipsaws
in your trading account. Yes, you have to compromise
in terms of timing the Trend but overall, whipsaw phase you can entirely
avoid in the market. Let us now look at
Four case studies across various time frames. The first case study is on a
five-minute time frame chart. In this chart, in
the congestion region that I have marked, both
Tenkan and Kijun were flat and Senkou A and Senkou
B were not trending. Therefore in this region, there was no trade
there to be taken. The only region where
short trade was available was in these region where
price was moving lower and Tenkan and Kijun
were both trending lower. Now, do look at Senkou
A, Senkou B and Chikou. All three were
clearly trending lower and suggesting
that trend is down. Once you enter the trade,
stop loss can be set at Senkou A or Senkou B or
even at the Kumo Twist level. All these three regions work
well with respect to stop loss. And therefore, you have to
see what suits you best. For exiting trades, you
can either use Kumo Cloud as exit strategy or can
simply use structure of lower high and
lower low to exit. In this chart, exit can
be taken at these points where price attempts to move
above the Ichimoku cloud. Since exit is very subjective, I will cover this in depth
in subsequent videos. In this second case study, we will take daily
time frame chart. Let us first take a look
at this congestion region. Price moves below Ichimoku
cloud at this particular point, but both Tenkan
and Kijun are flat. On top of this, if
you even take a look at Senkou A and Senkou
B, both are clearly flat. Hence, short conditions
are not fulfilled for this particular region. Price then moves above the
Kumo cloud and both Tenkan and Kijun start trending
higher at this region that I have marked. Look at Senkou A and Senkou B, both have started
trending higher. If you now look
at Chikou as well, it is clearly above price and
moving higher with momentum. The combination you have
to wait for is alignment between various elements
of Ichimoku Cloud which clearly suggest
the same thing with respect to trend. Do note here that Ichimoku Cloud is an excellent trend
following indicator, but not many traders
realize how effective it is in keeping a trader out of market during
non-trending phases. This is one of the main
reasons why Ichimoku Cloud should always be
tracked closely. Let us now consider a case
of one-minute time frame. In this congestion zone, no
trade was available based on the Main rules and
the Confirmation rules that we just discussed. Once price moved below this
range that I’ve marked, short trade was clearly
there to be taken because all elements
had aligned perfectly. In this region, if you
see, Tenkan and Kijun were clearly trending lower. Do take a note at
Senkou A and Senkou B. Clearly trend was down. If you look at Chikou
during all these phases, Chikou was clearly below price suggesting that trend
was on the downside. The beauty of Ichimoku Cloud is that it works
across all time frames and it is suitable in
Scalping, Day Trading, Swing Trading and
Positional Trading. Now this is something I
will be explaining further in this series. Let us now look at
gold as a case study on a weekly time frame chart. So in this region, gold
was clearly consolidating and this is clearly
evident with Tenkan and Kijun being flat
along with lack of trend in Senkou A and Senkou B. Look at how many times
Kumo twist is happening where price is moving
above and below the cloud. So there was no trade
there to be taken. In the current context, if
you see, look at how price is clearly trending
higher and how Senkou A and Senkou B are
trending on the upside. Along with this, take
a look at Chikou, it is clearly above the price and take a look at
Tenkan and Kijun. Both are clearly trending high. Now, heading forward,
if one is trading gold, one should only look
to take long trades as trend is clearly up. So ’til now we have
seen Basic Rules and Confirmation rules for
Kumo Breakout Strategy. Do note that application
of Kumo Breakout Strategy is valid for Intraday
trading, positional trading and for swing trading. In the next three parts of
Ichimoku Cloud Strategy, I will be covering Kumo
Breakout for each type of trading and I’ll
be explaining Entry, Exit, and stop loss in detail. So before we move
to the next part, these are the key guidelines
you have to follow while trading the Kumo Breakout. You need to look
for cleaner charts where trend is clearly visible. Avoid charts where price
is stuck in a range. And price should be clearly
above or below the Kumo cloud. You also need to look
for position of price with respect to Kumo
Cloud, Senkou A and B, Chikou and Tenkan and Kijun. So at all times, each of these Ichimoku
elements should be aligning in the direction of trend. If you follow these
basic guidelines that I’ve shown you here, you will end up trading only
strong trends in the market. So do check out the details
of our VWAP trading webinar. This is one training you
should not be missing. Details of the same would
come up in front of you. So kindly consider
hitting the like button and sharing this video
if you find it useful. Thanks a lot for
watching this video guys. Take care and be safe.

30 thoughts on “ICHIMOKU CLOUD Trading Strategy – KUMO BREAKOUT – Part 2 ??”

  1. Hi Guys,

    Details about the VWAP Trading Online Course can be found below. This is the same training that will be given in Mumbai & Bengaluru Convention.

    https://bit.ly/2VP8D30

    Can assure of only one thing, that this course will change the way you Trade Forever.

    Queries – TradeWithTrendTraining At Gmail

  2. You are revolutionalising learning and understanding the markets. I am sure you must have read tens of books and applied. Great Going..

  3. Thanks Sir for explaining such complex thing in a simple way …very happy to hear you have started online courses ..kindly let us know when is the conference meet in Mumbai ,would like to see my guru in personal..thanks

  4. Thank you sir for making ichimoku really undesrtandable in the most simplest and effective way to traders like me and many??

  5. Thanks for your time and effort. Case study of different charts and different time frame are so useful. Thanks for the teaching. Have a nice time. Thanks a lot.

  6. Hi Guruji, First i am congratulation to you for starting course for traders, i am wish with my heart your course should be going to be success like blockbuster movie.
    Dont stop here i am requesting to you add some more paid courses for Traders and investors, i saw the course fee its very nominal and any one can join because this is one time investment and i will give 100% no one can dissatisfy this course…!, becoz you are knowledge bank, and am very happy to heard all tickets sold out about Vwap course Bangalore and Mumbai both the city, unexpectedly i am not joining this time bcoz, already joined Tradezilla 2.0 – market profile and orderflow course i think you heard Rajendran he his mentor of this course.
    once again best of luck you and your team.

  7. We know it's a weekend when we see a notification from your channel :-). Saw your updates on the training sessions, hope they turn out to be block busters as well

    This video is an interesting one, as I was under the impression that Ichimoku works well only in bigger time frames but glad you provided case studies with 5 min and even 1 min, I will need to observe this in the coming weeks on the charts

    Thanks again!

  8. Missed out booking for convention.. Have booked for online training ?.. Really ur seminar booked like rajani kanth movie tickets???.. Think overnight it got booked… Cool

  9. sorry to say like this
    i dont hv money to afford now
    Can I learn more by watching all of
    u r videos and practice let it take time
    ->I had a strong hope one day I
    would run hedge fund

  10. Hello,
    Thanks for all the efforts you are putting to make these videos. They are immensely helpful to beginners like me.
    If possible can you shed some light of gap trading(intraday).
    I am asking specifically for gaps because, they are the most noticeable.
    Thanks and regards

  11. Thank you sir for your efforts really explains why you prefer to be a trend trader.

    Sir I wish to join your convention someday I will save up for it.
    For now I will try to learn from youtube.

    Will try to practice the ichimoku method.
    Thanks for sharing your wisdom for free.
    May god bless you. πŸ™‚

Leave a Reply

Your email address will not be published. Required fields are marked *