The kijun Sen Cross is one of
the best trading system within the Ichimoku Kinko Hyo.
Time Frame 5 min or higher.
Currency Pairs:any.
The Kijun Sen Cross signal
If Kijun Sen Cross signal
crosses the price curve from the bottom up there is is a bullish
signal. If it crosses from the top down, there is a bearish signal.
STRONG KIJUN SEN CROSS SIGNAL
A strong kijun sen cross Buy signal
when there is a bullish cross above the kumo.
A strong kijun sen cross Sell signal
when there is a bearish cross below the kumo.
NEUTRAL KIJUN SEN CROSS SIGNAL
A neutral kijun sen cross Buy signal
there is when a bullish cross within the kumo.
A neutral kijun sen cross Sell signal
there is when a bearish cross within the kumo.
WEAK KIJUN SEN CROSS SIGNAL
A weak kijun sen cross Buy signal there
is when a bullish cross below the kumo.
A weak kijun sen cross Sell signal
there is when a bearish cross above the kumo.
See the chart in Picture.
Chikou span confirmation
As with the tenkan sen/kijun sen cross
strategy, the savvy Ichimoku trader will make good use of the chikou
span to confirm any kijun sen cross signal. Each of the three
classifications of the kijun sen cross outlined above can be further
classified based on the chikou span's location in relation to the
price curve at the time of the cross.
If the cross is a "Buy"
signal and the chikou span is above the price curve at that point in
time, this will add greater strength to that buy signal.
Likewise, if the cross is a "Sell" signal and the chikou
span is below the price curve at that point in time, this will
provide additional confirmation tot hat signal. If the chikou span's
location in relation to the price curve is the opposite of the kijun
sen cross's sentiment, then that will weaken the signal.
Entry
The entry for the kijun sen cross is
very straightforward - an order is placed in the direction of the
cross once the cross has been solidified by a close. Nevertheless, in
accordance with good Ichimoku trading practices, the trader should
bear in mind any significant levels of support/resistance near the
cross and consider getting a close above those levels before
executing their order.
Exit
A trader exits a kijun sen cross trade
upon their stop-loss getting triggered when price crossing the kijun
sen in the opposite direction of their trade. Thus, it is key that
the trader move their stop-loss in lockstep with the movement of the
kijun sen in order to maximize their profit.
Stop-Loss
The kijun sen cross strategy is unique
among Ichimoku strategies in that the trader's stop-loss is determined and managed by the kijun sen
itself. This is due to the kijun sen's strong representation of price
equilibrium, which makes it an excellent determinant of sentiment.
Thus, if price retraces back belowthe kijun sen after executing a
bullish kijun sen cross, then that is a good indication that
insufficient momentum is present to further the nascent bullish
sentiment.
When entering a trade upon a kijun sen
cross, the trader will review the current value of the kijun sen and
place their stop-loss 5 to 10 pips on the opposite side of the kijun
sen that their entry is placed on. The exact number of pips for the
stop-loss "buffer" above/below the kijun sen will depend
upon the dynamics of the pair and price's historical behavior
vis-a-vis the kijun sen as well as the risk tolerance of the
individual trader, but 5 to 10 pips should be appropriate for most
situations. When looking to enter Short, the trader will look to
place their stop-loss just above the current kijun sen and when
looking to enter Long, the trader will place their stop-loss just
below the current kijun sen.
Once the trade is underway, the trader
should move their stop-loss up/down with the movement of the kijun
sen, always maintaining the 5 to 10 pip "buffer". In this
way, the kijun sen itself acts as a "trailing stop-loss" of
sorts and enables the trader to keep a tight hold on risk management
while maximizing profits.
Take Profit Targets
Take profit targetting for the kijun
sen cross strategy can be approached in one of two different ways. It
can be approached from a day/swing trader perspective where take
profit targets are set using key levels, or from a position trader
perspective, where the trader does not set specific targets but
rather waits for the current trend to be invalidated by price
crossing back over the kijun sen in the opposite direction of their
trade.
Examples
In the chart in picture below for
USD/CHF we can see a bullish kijun sen cross at point A. While the
initial cross is above the kumo and therefore a relatively strong
cross, it is still beneath a very key chikou span level (not visible
on this chart), so we wait until we get a close above that key level
before entering at point B. At this point, we also have the
additional benefit of confirmation from a bullish tenkan sen/kijun
sen cross and a nice upward angle to the kijun sen, bolstering our
prospects for more bullish price action even more. For our stop-loss,
we follow the kijun sen trading strategy guidelines and place it 10
pips below the prevailing kijun sen at point C.
Once we place our entry and stop-loss
orders, we merely wait for the trade to unfold while continually
moving up our stop-loss with the kijun sen. Price rises nicely for
the next 40 days staying well above the kijun sen. After this point,
price begins to drop and, on the 44th day, price crosses the kijun
sen and hits our stop-loss at point D closing out our trade and
netting us a profit of 641 pips.
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