I personally only take longs if the Chikou Span is above the price and cloud. Also pay attention to all lines, Tenkan Sen, Kijun Sen, Senkou Span A and B and Chikou Span. Make sure they are pointing upwards and not flat or pointing down. This greatly increases the chance of a successful trade in my experience.
Most trading content creators just like to talk about strategies but you bring the hard data to the table, keep up the good work, excited for the MQL5 coding section. I feel that just as with most indicator concepts, the Chikou may only work for a very particular market behaviour, basically if its overfitted.
Hi Martin. I always watch your videos and find them very interesting. And thank you very much for sharing your knowledge here on youtube. About the Chikou Span filter, I was somehow surprised, not because of the results, but because I thought you were going to test and only allow trades when the Chikou Span was above the Cloud AND also above price (26 periods before). Not just above the Cloud. All of this for Long trades, of course. And vice-versa for Shorts. I think most of the people I've heard speaking about Chikou Span adopted this method. Would you find worthwhile and interesting enough to try this approach and see if the results are significantly better? I'll let you evaluate this suggestion. Thank you once again. Cheers!
Hi António. Yes, I tried using price in relation to the Chikou Span first, but couldn't get good results. I then tried using the Chikou/Kumo which gave 'slightly' better results. But neither produced what I would consider a valuable filter. But thanks for the suggestion. Martyn
Hi, Martin. Thank you for sharing and theaching this valualble information. I made a backtest of this strategy, but I used the chicow span in other way. I use the chicow span checking that it's above the price 26 bars before for buys and below for sells. For the stop loss I use the ATR. I couldn't find any impruvement with the use of chicow yet
Hi Fernando. Yes I tried using price first, but couldn't get good results. I then tried using the Kumo which was 'slightly' better. But neither produced what I would consider a valuable filter. But thanks for the suggestion. Martyn
I have asked Kei (japanese forex trader kei) directly, who is a direct descendant student from the ichimoku founder's son, that indeed the chikou span should be above both price action and cloud to validate the trade. However I can say I am witnessing a divide between the philisophical and quantitative aspects of this indicator. Whatever works, works. Invest Diva who is another known trader also suggest the same strategy, and also another author (forgot the name) who subscribes to the same chikou span strategy.
Agreed. I coded the Ichimoku last week and also realized the Chikou span is a useless line. Could not find anyway to implement it into a strat. It just kept messing with the results.
I read the book of Sadekar. An important concept is that when the bull T/K cross occurs and the Chikou is not above the price, the signal is still valid UNTILL che Chikou goes above price into "open air". I think this concept is very difficulto to implement and code.
Dear Martyn, Thanks for your gold contents. I only heard Chikou Span should be above price or below as the filter instead of above or below Kumo Cloud. Many on the web said that. I think it will not be wise to check with the Kumo since almost all good positions would be filtered. Note sure what would be the result if you check with the price instead (close price or body candle price).
Hi Arian. I did try using price first. But this didn't produce good results. So I then moved on to using the Kumo instead which was 'very slightly' better. But for the strategy in question, neither improved the results sufficiently. But thanks for the suggestion. Martyn
At first glance, all these patterns/filters or strategy look very effective not until you write it's program and backtest do you discover it's not that great. That's the edge an algo trader has over manual trading. I always love your vids. Thank you
Hi Michael. I did try using price first. But this didn't produce good results. So I then moved on to using the Kumo instead which was 'very slightly' better. But for the strategy in question, neither improved the results sufficiently. But thanks for the suggestion. Martyn
I understood that Chikou span has to be above price in a rally and below price in the bearish trend. If this applies then chikou span will naturally be above or below the cloud.
Hi Martin, I guess that when you act on mean reversion assets , the distance that the cross accured from the kumo is matters to the span confirmation. Maybe use this span rule only when the cross is near the kumo or retested the kumo.
Also a very important insight is to watch what the price did in the last 26 bars in a way of sup/res , volume and all trend continues confirmations custom that being used.
Hi - Just down to time constraints really, and the fact I don't personally trade indexes and gold as much as FX. Hopefully other traders will take these ideas and adapt to other use cases... Please feel free to post your results if you do :)
Hi Daniel. I did try using price first. But this didn't produce good results. So I then moved on to using the Kumo instead which was 'very slightly' better. But for the strategy in question, neither improved the results sufficiently. But thanks for the suggestion. Martyn
@@Darwinexchange Yes, that's something I also struggled. If I understand the intention behind the Chikou, then the idea is to see whether current price broke out of the price range ending 26 candles before. In that interpretation a single delayed Donchian channel could (?!) do the job ...
Hello! In the Karen Peloile book 'Trading with Ichimoku - A practical guide to low-risk Ichimoku strategies' she doesn't look at Chikou Span position relative to the cloud but the breakthrough of the cloud or kijun in addition to others rules for confirmation. Somes extracts (Chikou Span = Lagging Span in this book) : "While the cloud indicates future levels of support and resistance as well as a zone of equilibrium, the Lagging Span hints to potential price movements in the making by reminding traders of important levels tested by the market in the past." "The Lagging Span reminds traders of former obstacles by portraying current prices in the past. It will react in the same way as prices do when the market comes into contact with the Kijun or the cloud, for example. Crossovers of the Kijun or the SSB by the Lagging Span further validate initial movements in current prices, thereby confirming the start of trend reversals and above all the potential of follow-through. This potential is determined by the absence of obstacles or freedom of movement that the Lagging Span faces. The Lagging Span can be considered as the key to unlocking the secret of validating price movements with Ichimoku, making it a vital element in any trading strategy." "A new position will only be initiated when the Lagging Span has broken its low cloud. Note that such an event would occur at the same time as the Kijun break by the Lagging Span" "Lagging Span validates this by equally breaking below its Kijun"
I personally only take longs if the Chikou Span is above the price and cloud. Also pay attention to all lines, Tenkan Sen, Kijun Sen, Senkou Span A and B and Chikou Span. Make sure they are pointing upwards and not flat or pointing down. This greatly increases the chance of a successful trade in my experience.
Most trading content creators just like to talk about strategies but you bring the hard data to the table, keep up the good work, excited for the MQL5 coding section. I feel that just as with most indicator concepts, the Chikou may only work for a very particular market behaviour, basically if its overfitted.
Hi Martin. I always watch your videos and find them very interesting. And thank you very much for sharing your knowledge here on youtube.
About the Chikou Span filter, I was somehow surprised, not because of the results, but because I thought you were going to test and only allow trades when the Chikou Span was above the Cloud AND also above price (26 periods before). Not just above the Cloud. All of this for Long trades, of course. And vice-versa for Shorts.
I think most of the people I've heard speaking about Chikou Span adopted this method.
Would you find worthwhile and interesting enough to try this approach and see if the results are significantly better?
I'll let you evaluate this suggestion.
Thank you once again. Cheers!
Hi António. Yes, I tried using price in relation to the Chikou Span first, but couldn't get good results. I then tried using the Chikou/Kumo which gave 'slightly' better results. But neither produced what I would consider a valuable filter.
But thanks for the suggestion.
Martyn
Hi, Martin. Thank you for sharing and theaching this valualble information. I made a backtest of this strategy, but I used the chicow span in other way. I use the chicow span checking that it's above the price 26 bars before for buys and below for sells.
For the stop loss I use the ATR. I couldn't find any impruvement with the use of chicow yet
Hi Fernando. Yes I tried using price first, but couldn't get good results. I then tried using the Kumo which was 'slightly' better. But neither produced what I would consider a valuable filter.
But thanks for the suggestion.
Martyn
I have asked Kei (japanese forex trader kei) directly, who is a direct descendant student from the ichimoku founder's son, that indeed the chikou span should be above both price action and cloud to validate the trade. However I can say I am witnessing a divide between the philisophical and quantitative aspects of this indicator. Whatever works, works. Invest Diva who is another known trader also suggest the same strategy, and also another author (forgot the name) who subscribes to the same chikou span strategy.
Agreed. I coded the Ichimoku last week and also realized the Chikou span is a useless line. Could not find anyway to implement it into a strat. It just kept messing with the results.
Good to get confirmation of a similar problem. Thanks. Martyn
I read the book of Sadekar. An important concept is that when the bull T/K cross occurs and the Chikou is not above the price, the signal is still valid UNTILL che Chikou goes above price into "open air". I think this concept is very difficulto to implement and code.
Nice video. I allways check everything.
Dear Martyn,
Thanks for your gold contents. I only heard Chikou Span should be above price or below as the filter instead of above or below Kumo Cloud. Many on the web said that. I think it will not be wise to check with the Kumo since almost all good positions would be filtered. Note sure what would be the result if you check with the price instead (close price or body candle price).
Hi Arian. I did try using price first. But this didn't produce good results. So I then moved on to using the Kumo instead which was 'very slightly' better. But for the strategy in question, neither improved the results sufficiently. But thanks for the suggestion. Martyn
At first glance, all these patterns/filters or strategy look very effective not until you write it's program and backtest do you discover it's not that great. That's the edge an algo trader has over manual trading. I always love your vids. Thank you
Thanks Michael
Chico span is whether over the price bullish or under the price bearish not over kumo
Hi Michael. I did try using price first. But this didn't produce good results. So I then moved on to using the Kumo instead which was 'very slightly' better. But for the strategy in question, neither improved the results sufficiently. But thanks for the suggestion. Martyn
I understood that Chikou span has to be above price in a rally and below price in the bearish trend. If this applies then chikou span will naturally be above or below the cloud.
Hi Martin, I guess that when you act on mean reversion assets , the distance that the cross accured from the kumo is matters to the span confirmation. Maybe use this span rule only when the cross is near the kumo or retested the kumo.
Also a very important insight is to watch what the price did in the last 26 bars in a way of sup/res , volume and all trend continues confirmations custom that being used.
And also make a filter of data2 maybe daily and then execute on 1 hour as long as the filter is true will also help.
Gracias...
Hi I am just wondering why you didn’t implement different TFs and try gold and Indexes ..
Hi - Just down to time constraints really, and the fact I don't personally trade indexes and gold as much as FX. Hopefully other traders will take these ideas and adapt to other use cases... Please feel free to post your results if you do :)
Nice work. However, afaik the Chikou should be above/below the candlestics, not the kumo ...
Hi Daniel. I did try using price first. But this didn't produce good results. So I then moved on to using the Kumo instead which was 'very slightly' better. But for the strategy in question, neither improved the results sufficiently. But thanks for the suggestion. Martyn
@@Darwinexchange Yes, that's something I also struggled. If I understand the intention behind the Chikou, then the idea is to see whether current price broke out of the price range ending 26 candles before. In that interpretation a single delayed Donchian channel could (?!) do the job ...
Chikou as trend filter works very well my friend :) I use it every day. You should know how to use it and how to avoid fake signal. That it !!!
Maybe you could share your technique then? Thanks, Martyn
Hello! In the Karen Peloile book 'Trading with Ichimoku - A practical guide to low-risk Ichimoku strategies' she doesn't look at Chikou Span position relative to the cloud but the breakthrough of the cloud or kijun in addition to others rules for confirmation. Somes extracts (Chikou Span = Lagging Span in this book) : "While the cloud indicates future levels of support and resistance as well as a zone of equilibrium, the Lagging Span hints to potential price movements in the making by reminding traders of important levels tested by the market in the past." "The Lagging Span reminds traders of former obstacles by portraying current prices in the past. It will react in the same way as prices do when the market comes into contact with the Kijun or the cloud, for example. Crossovers of the Kijun or the SSB by the Lagging Span further validate initial movements in current prices, thereby confirming the start of trend reversals and above all the potential of follow-through. This potential is determined by the absence of obstacles or freedom of movement that the Lagging Span faces. The Lagging Span can be considered as the key to unlocking the secret of validating price movements with Ichimoku, making it a vital element in any trading strategy." "A new position will only be initiated when the Lagging Span has broken its low cloud. Note that such an event would occur at the same time as the Kijun break by the Lagging Span" "Lagging Span validates this by equally breaking below its Kijun"
Thanks for the additional insights Ronan. Martyn