The FX PostThe FX Post
    What's Hot

    Bri-Chem Announces 2025 First Quarter Financial Results

    May 16, 2025

    Institutional investors juggle bitcoin ETF holdings, US filings show

    May 16, 2025

    PumpSwap Launched Revenue Sharing Aimed at Incentivizing Creators – Tekedia

    May 15, 2025
    The FX Post The FX Post
    • Best Fx Robots
    • Forex
      • News
      • Forex 101
      • Forex Forecasts
      • Broker Reviews
    • Crypto
      • News
      • Crypto 101
      • Crypto Forecasts
      • Crypto Reviews
    • Indices
      • News
      • Analysis
      • Commodities
      • Reviews
    • Automated Trading
      • Forex Signals
      • Forex Robots
      • Copy Trading
    • Top
      • Best Forex Robots
    The FX PostThe FX Post
    Home » Ichimoku Cloud Crypto Trading Strategy: How to Apply It?
    Crypto Crypto 101 Updated:June 23, 2022

    Ichimoku Cloud Crypto Trading Strategy: How to Apply It?

    March 16, 20226 Mins Read
    Facebook Twitter Pinterest LinkedIn Reddit
    Share
    Facebook Twitter LinkedIn Pinterest Reddit

    Ichimoku Cloud trading method is different from the conventional technical analysis as it is an indicator and a whole trading system. Many successful traders worldwide only take investment decisions based on Ichimoku Cloud only. 

     

    Markets are invaded by algorithms
    Secure your passive income with algo-based trading systems
    Learn more

    On the other hand, the indicator includes several tools like Tenkan Sen, Kijun Sen, Kumo Cloud that need a detailed understanding of these before using it. The following section is for you if you are keen to build a trading strategy based on this tool. 

    What is Ichimoku Cloud?

    It is a simple technical indicator that can show a trading instrument’s reversal and continuation patterns. The uniqueness of this indicator is that it is combined with multiple elements that help traders to see the market from various angles. 

    In general technical indicators use a fixed mathematical calculation, and the result with this indicator comes automatically once the price reaches a level based on the indicator. 

    On the other hand, some dynamic indicators like moving average and Bollinger Bands change the value with the price change. The Ichimoku Cloud uses tools where the Kumo Cloud works as a significant reversal level. Moreover, the near-term support and resistance pressure come from dynamic Kijun Sen and Tenkan Sen.

    Kijun Sen and Tenkan Sen

    Let’s see what these elements mean for crypto-traders:

    • Tenkan Sen

    The average price for the last nine candles is high and low. For traders, it works as a dynamic support or resistance level, which shows the market sentiment of short-term traders.

    • Kijun Sen

    It is the second phase of support or resistance level that shows the market sentiment of medium-term traders. It shows the average price for the last 26 candles. The calculation of this method is shown below.

    formula

    • Senkou Span A

    The midline of the Tenkan and Kijun Sen line shows the long-term perfective of a trend.

    • Senkou Span B

    It is the Midline of 26 periods high and 26 periods low. It is shown as the up and downline of Kumo Cloud where investors should monitor where the price is trading based on Senkou Span A and B.

    formula

    How to trade using Ichimoku Cloud in trading strategy?

    It is a complex method that is very effective in cryptocurrency trading. Traders can use this indicator alone as it has many legs to show the price direction from a birds-eye view.

    The ideal approach using this method is to find the market trend and open buying/selling positions once the price is ready to follow the long-term trend. In that case, traders can use a multi-time frame or not. The Ichimoku trading method also applies to other indicators like moving average, MACD, or RSI. However, the best approach is to use an oscillator besides the primary indicator to increase the trades probability.

    A short-term trading strategy

    In the short-term trading method, we will see how to buy or sell any crypto token in the intraday chart. In this method, the aim is to gain from the short-term fluctuation without holding it for a long time. It is a riskier method than long-term HODLing, and it requires deep technical analysis knowledge.

    Bullish trade scenario

    The bullish trade needs the price to remain above the Kumo Cloud to consider the overall trend as bullish. Later on, a correction will come where traders need to monitor the price regularly. Once the price moves from the correction, it is time to buy.

    Short-term bullish trade example
    Short-term bullish trade example

    As per the above example, the buy trade is valid from the following condition:

    • A new bullish swing break above the Kumo Cloud represents the primary attempt of bulls.
    • The price should come lower with a corrective momentum.
    • Once the correction is complete and the price formed a bullish candle above the dynamic Kijun Sen the buy trade is valid.
    • The SL is below the swing low and the TP is based on RR.

    Bearish trade scenario

    The bearish trade is the opposite version of the intraday buys trade that is applicable on the CFDs only. 

    Before opening a sell trade make sure to find these conditions in the price chart:

    • The price is trading below the Kumo Cloud indicating that bears are in control.
    • A minor bullish correction appears with a failure to take over the cloud resistance.
    • Bears took control over the price again with a sell candle below the Kijun Line.
    • The sell trade is valid once the price forms a bearish rejection from the Kijun Sen.
    • The SL is above the near-term swing high and TP is based on risk and reward.
    Short-term bearish trade example
    Short-term bearish trade example

    A long-term trading strategy

    The long-term method applies to finding the time to buy and hold the trade for the long run. Therefore, this method applies to higher time frames like daily or weekly.

    Bullish trade scenario

    The buying trade is valid once the following conditions appear in the price:

    • The price reached any key support level, which is visible in the naked chart.
    • The gap between the price and dynamic Kijun Sen extended.
    • The future cloud is extremely bearish.
    • A bullish rejection appeared with a long wicked candle above the Kijun Line to validate the buy.
    • The stop loss and take profit is based on the risk vs. reward ratio.

     

    Long-term bullish trade example
    Long-term bullish trade example

    Bearish trade scenario

    The buying trade is valid once the following conditions appear in the price:

     

    • The price reached any key resistance level, which is visible in the naked chart.
    • The gap between the price and dynamic Kijun Sen extended.
    • The future cloud is extremely bullish with a strong gap between Senkou Span A and Senkou Span B
    • A bearish rejection appeared with a long wicked candle below the Kijun Line to validate the sell.
    • The stop loss and take profit is based on the risk vs. reward ratio.
    Long-term bearish trade example
    Long-term bearish trade example

    Pros & cons

    Pros Cons
    • This complex tool can define the price structure in a better way.
    • This method needs a detailed understanding of all its tools.
    • This method is better to find the reversal and continuation of the trade.
    • The success rate of this method is high on continuation only.
    • The tool has an affordable risk and reward ratio.
    • It does not work well in case of a sharp price crash.

    Final thoughts

    It is more than a trading indicator as it has several tools to define the price with a better understanding. Therefore, investors can consider it as a reliable trading method. 

     

    On the other hand, excessive volatility is the primary barrier for traders. Based on it, market participants need to find when the overall price direction is stable before taking trades.

    Markets are invaded by algorithms
    Secure your passive income with algo-based trading systems
    Learn more
    Trading strategy
    Share. Facebook Twitter Pinterest LinkedIn Reddit

    Related Posts

    7.2

    Jet-Bot Crypto Copy Trading Review

    June 3, 2023
    Bitcoin dips

    Bitcoin Dips Listed Below $20,000 With Fundstrat Considering ‘Last Washout’

    June 29, 2022
    Crypto disaster

    Crypto Disaster Drags Providing Returns From 25,000% to Nearly No

    June 27, 2022
    XRP leads

    XRP Leads Crypto Majors Recuperation, Bitcoin Rises Over $21K as Rate-Hike Issues Subside

    June 24, 2022
    Add A Comment

    Leave A Reply Cancel Reply

    2  +  5  =  

    Best FX Post
    Best Forex Robots (Expert Advisors) 2021

    Best Forex Robots (Expert Advisors) 2022: Passive Income From Algo Trading Systems

    July 7, 2021

    Top 10 Lending Platforms for Crypto Loans

    June 1, 2022
    forex eurusd trading charts

    Top 10 Best Forex Brokers In All Times

    June 1, 2022
    Recent Posts
    • Bri-Chem Announces 2025 First Quarter Financial Results
    • Institutional investors juggle bitcoin ETF holdings, US filings show
    • PumpSwap Launched Revenue Sharing Aimed at Incentivizing Creators – Tekedia
    • Cold, hard truth: Alaskans lose $26M to Internet crime
    • New gas processing plant will be a game-changer for Ghana – Finance Minister – Ghanamma.com
    Featured Reviews

    Traders Connect Review

    May 18, 2023

    System Levels Review

    May 26, 2023
    TechBerry

    TechBerry Review: Pros, Cons, Recommendations

    September 18, 2021
    Categories
    • Analysis
    • Automated Trading
    • Best FX Post
    • Broker Reviews
    • Commodities
    • Copy Trading
    • Crypto
    • Crypto 101
    • Crypto Bots
    • Crypto Forecasts
    • Crypto Reviews
    • Crypto Robot
    • Forex
    • Forex 101
    • Forex Forecasts
    • Forex Robots
    • Forex Signals
    • Forex Signals
    • Guides
    • Indices
    • News
    • News
    • News
    • News
    • Reviews
    • Reviews
    • Uncategorized
    Twitter BlogLovin
    © 2025, Thefxpost.com.
    • Contact

    Type above and press Enter to search. Press Esc to cancel.