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Showing posts from March, 2011

Support levels of Dow Jones | 23-Mar-2011

In my previous article, under tutorial section, I've discussed how to find support and resistance levels of chart using Ichimoku indicator. Now, I'm posting another example on the same. Below is the daily technical chart of Dow Jones using Ichimoku indicator.

If you see carefully, the price took support on Senkou Span A and Senkou Span B lines of Kumo twice on around end of November 2010 and then on 16-Mar-2011 respectively.

The chart will turn bearish once it closes below kumo.

Now, you must have realized how easy to find support levels of any chart.

Ichimoku Kinko Hyo Tutorial - Part 3

In the next series of Ichimoku tutorial, we'll discuss the basics of one of the most important component - Kumo. In Japanese, kumo means the cloud. I'll take 3 different examples of chart to understand it. For the sake of clarity, I've removed all other components of Ichimoku (TS, KS etc.) except Kumo.
Example 1

In the above chart, the price is ABOVE kumo. So, we can say, the chart is bullish and one should take only long calls in it. Just avoid any short-selling till the price is above kumo. And in such a situation, the upper & lower lines of Kumo acts as support lines. It has been seen that during bullish run, price sometimes takes support at these lines and then bounce back from here.
Example 2

Chart of example 2 shows bearish chart, as the price is BELOW kumo and now the same lower and upper lines of Kumo acts as resistance1 and resistance2. One should take ONLY short-selling calls in such charts.
Example 3

In 3rd example chart, the price is INSIDE kumo, so this is …

Ichimoku Kinko Hyo Tutorial - Part 2

This is part 2 of the series on Ichimoku Kinko Hyo tutorial. In the previous part, we've discssed the history and components of Ichimoku indicator. Here, I'll eloborate on mathematic portion of this indicator and rule no. 1 for trading via Ichimoku.

Mathematic component of Ichimoku
Tenkan Sen = (HIGHEST HIGH + LOWEST LOW)/2 for the past 9 periods
Kijun Sen = (HIGHEST HIGH + LOWEST LOW)/2 for the past 26 periods

Senkou Span A  = (Tenkan Sen + Kijun Sen)/2 time-shifted forward 26 periods (into the future)

Senkou span B  = (Highest High + Lowest Low)/2 for the past 52 periods time-shifted forward 26 periods (into the future)

This will create the Kumo 26 periods ahead of current price, therefore giving us direction with regards to future support and resistance.

Chikou Span (“lagging line”) = Current closing price time-shifted backwards 26 periods (into the past)

History of 9, 26, 52

At this point, many of you are probably wondering how the number of periods 9, 26 and 52 came about i…

Ichimoku Kinko Hyo Tutorial - Part 1

I'm starting a series of tutorials on trading in forex and stock market. As you know, one of my favorite indicator is Ichimoku Kinko Hyo. So, i'll start with this indicator. This is the part - 1 tutorial of this indicator.
First of all, a brief history of this indicator.
Ichimoku was developed in the late 1930s by Goichi Hosoda, a Japanese journalist who used to be known as Ichimoku Sanjin, which can be translated as "What a man in the mountain sees". He spent thirty years perfecting the technique before releasing his findings to the general public in the late 1960s.
Ichimoku Kinko Hyo translates to 'one glance equilibrium chart' or 'instant look at the balance chart' and is sometimes referred to as 'one glance cloud chart' based on the unique 'clouds' that feature in ichimoku charting. This is one of the few indicator, which is complete in itself. In one screen, this indicator can give you support, resistance, bullish or bearish …

Doda-Stochastic Indicator for MetaTrader

Stochastic is one of the famous indicator used by many investors and traders. Many software, including MetaTrader, provide this indicator in-built. But this indicator gives many buy and sell signals on a shorter time frame.

Below is the variant of this indicator - Doda Stochastic.

It displays itself in the lower window of a chart.  The indicator is easy to use and the rules are same as you use normal Stochastic indicator.It also gives you screen alert on buy & sell signals.
Some main points regarding the Doda Stochastic indicator:

I'm not the original developer of this indicator. I just made some changes in it. So, the credit and copyright, if any, goes to original coder.
Use this indicator on higher time frame like H1 or H4 but not less than that.
Use this indicator on the demo account first and later on the real account.
Use other indicators like Doda-Donchian & Doda-Bollinger also along with Doda-Stochastic indicator to get a complete picture of trading call.
You may downl…

How to filter false signals of Doda-Donchian indicator?

I got several emails and positive comments on Doda-Donchian indicator posted few weeks back. Most of you admitted that it gives very good & accurate signals. But, like no indicator can be 100% accurate, this indicator also sometimes false signals.Today, I'll discuss something about filteration of false signals from Doda-Donchian indicator.
For that, I'm posting the technical chart of EURUSD at time frame H4 with indicators - Doda-Donchian, Doda-Bollinger and BBSqueeze Dark. All these 3 indicators for MetaTrader can be downloaded from indicators section of this website.

Around 17-Feb-2011, Doda-Donchian & Doda-Bollinger gave buy signals and after few hours of volatility, EURUSD currency pair started their uptrend. Then, around 2-Mar-2011, the price closes below Doda-Donchian line; thus giving sell signal. But the price again started moving upward after couple of candles. That was the false signal. So, we need to filter out such false signals from out trading desk.

BBSqueeze Dark Indicator for MetaTrader MQL4

In last some posts, I've mentioned one of the powerful indicator BBSqueeze Dark. Today, I'm posting this indicator for MetaTrader platform along with its usage directions and sample chart. Posting below the technical chart of Silver on time frame H1.

The indicator starts below the main chart window and is very simple to use. There are 2 steps to take signals via this indicator.
Step 1:See the zero line. It consists of either Red dot or Green dot. If it is Green dot, it's time to take action. Now, action (buy or sell) has been defined in step 2 below. If it's Red dot, do nothing and stay away. Just hold your position.
Step 2: If you see Green dot in zero line, it's time to either Buy or Sell. For that, see the histogram lines, which are either on above zero line (blue lines) or below zero lines (red lines). Just buy on blue histogram and sell on red histogram.
In a summary, take long position when you see green dot on zero line AND blue histogram lines.
And sell you…