thomas wood | microquant identifying key support and ...value... · ichimoku valuecloud . risk...
TRANSCRIPT
![Page 1: Thomas Wood | MicroQuant Identifying Key Support and ...Value... · Ichimoku ValueCloud . Risk Disclaimer Trading or investing carries a high level of risk, and is not suitable for](https://reader030.vdocuments.us/reader030/viewer/2022021703/5e1667fbf3c9e1700963e1d0/html5/thumbnails/1.jpg)
Identifying Key Support and
Resistance Levels
presented by
Thomas Wood | MicroQuantSM
Ichimoku ValueCloud
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Risk Disclaimer
Trading or investing carries a high level of risk, and is not suitable for all persons. Before deciding to trade or invest you should carefully consider your investment objectives, level of experience, and ability to tolerate risk. This content is subject to change at any time without notice, and is provided for the sole purpose of education and assistance in making independent investment decisions. ValueCharts.com has taken reasonable measures to ensure the accuracy of the information contained herein; however, ValueCharts.com does not guarantee its accuracy and is not liable for any loss or damage which may result directly or indirectly from such content or from an inability to access such information or any delay in or failure of the transmission or the receipt of any instruction or notification in connection therewith. Any past performance results are shown for illustration and example only, are hypothetical and as such have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. Past performance is not necessarily indicative of future results.
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CFTC Rule 4.41 (Hypothetical Disclaimer)
U.S. Government Required Disclaimer - Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures, stocks or options on the same. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.
CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL, OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE DISCUSSED WITHIN THIS SITE, SUPPORT AND TEXTS. OUR COURSE(S), PRODUCTS AND SERVICES SHOULD BE USED AS LEARNING AIDS ONLY AND SHOULD NOT BE USED TO INVEST REAL MONEY. IF YOU DECIDE TO INVEST REAL MONEY, ALL TRADING DECISIONS SHOULD BE YOUR OWN.
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About Me… Dave Aquino
• 1995 Graduate of Vanderbilt University
• Full Broker at 23 with Merrill Lynch
• 12 Year Senior Advisor Vanguard Asset Management Service
• Going on 4+ years in Stocks & Options Live Trading Room
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• Ichimoku Kinko Hyo History
• Understanding the Cloud / Reading the
Cloud
• High Probability ValueCandlesticks
Ichimoku ValueCloud
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• 3 Consistent Value Candlesticks +
Ichimoku Trades
• 3 Major Ichimoku ValueCloud Trading
Opportunities
Ichimoku ValueCloud
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Ichimoku Kinko Hyo History
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Ichimoku Kinko Hyo…
• Ichimoku = “at a glance”
• Kinko = “balanced”
• Hyo = “bar chart”
Ichimoku ValueCloud
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Ichimoku Kinko Hyo history…
• Edo Period of medieval Japan 1700-1860
• Rise of the Merchant Class / Dojma Rice
Exchange - Osaka
Ichimoku ValueCloud
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Dojma Rice Exchange - Osaka
Ichimoku ValueCloud
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Ichimoku Kinko Hyo history…
• Father of Candlestick charts, Munehisa
Honma
Ichimoku ValueCloud
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Ichimoku Kinko Hyo history…
• Munehisa Homma was a rice merchant from Sakata, Japan who traded in the Dojima Rice market in Osaka during the Tokugawa Shogunate.
• Rules for Successful Trading
• Longest winning streak, over 100 in a row
Ichimoku ValueCloud
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Ichimoku Kinko Hyo history…
• 1940, Goichi Hosada added MA to Candlesticks
• So dedicated to the task before him (his wife divorced him, citing irreconcilable differences rooted in her raging jealousy of the numbers 9, 26 and 52),
• Goichi-san and his cadre of human calculators spent over 20 years crunching numbers.
• Finally in 1968, Hosoda published his findings: a system he naturally titled Ichimoku Kinko Hyo.
Ichimoku ValueCloud
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Ichimoku Kinko Hyo history…
• Sasaki, Nikko Citigroup Securities – 1996
– Ichimoku Kinko Studies, 18th edition
Ichimoku ValueCloud
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Ichimoku Kinko Hyo history…
• Enter any modern Japanese Trading
Room, most common charts you’ll see will
have Ichimoku Kinko Clouds
Ichimoku ValueCloud
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Understanding the Cloud
– Reading the Cloud -
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Ichimoku Clouds…
• Mid-point Prices are used
• Candlesticks with Moving Averages
– Present trend, current Support & Resistance
– Future trend 26 periods into future
– Confirmation of trend after 26 periods
Ichimoku ValueCloud
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Tenkan (Conversion Line)
• 9 Day Mid-Point Moving Average
• Most active moving MA line
– Current representation of current fair value
average
• Similar to 8 period EMA
Ichimoku ValueCloud
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Kijun (Base Line)
• 26 Day Mid-Point Moving Average
• Moves more slowly, smooth average
• Greater importance for Support &
Resistance
Ichimoku ValueCloud
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The Conversion Line & Base Line
• Actively create Support & Resistance
levels at their current prices
• They also act like traditional western-
charting Moving Averages, crosses up &
down can be read as changes in trend
Ichimoku ValueCloud
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Drawing the Cloud…
• Cloud Span A (Faster)
– Sum of 9-Day (Conversion) & 26-Day (Base) moving averages / 2 projected forward 26 days
• Cloud Span B (Slower)
– Mid-Point of the highest high, lowest low over the last 52 days
Ichimoku ValueCloud
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Chikou (Lagging line)
• Today’s Closing price, plotted 26 periods
behind
• Change in trend in Chikou is Lagging, but
considered the most important
confirmation of trend
Ichimoku ValueCloud
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High Probability Value
Candlestick Patterns
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Single Bar Reversal Patterns
(Golden Doji)
#1 Reversal pattern
• Ok to have red ends
• Body is all yellow
• Found at the end of multi-
bar move
• Center of 3 Bar reversals
Ichimoku ValueCloud
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Single Bar Reversal
Patterns
(Shooting Star)
#2 Reversal down
• Long upper wick
• Small body is at the
bottom
• Body can be bullish
or bearish, bearish is
better
Ichimoku ValueCloud
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Single Bar Reversal Patterns
(Hanging Man)
#3 Reversal down
• Medium lower wick
• Small body is at the top
• Body should be bearish
(close below open)
Ichimoku ValueCloud
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Single Bar Reversal Patterns
Long Handled Hammer
#1 Bullish Reversal
Mirror of Shooting star
• Long lower wick
• Small body is at the top
• Body can be bullish or
bearish, bullish is better
Ichimoku ValueCloud
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Single Bar Reversal
Patterns
(Long-Legged Doji)
– neutral, wait & see
• Lower & Upper wick
• Small body is
generally very small
Ichimoku ValueCloud
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2 Bar Reversal Patterns
(Bullish Engulfing)
- Double ended value
Ichimoku ValueCloud
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2 Bar Reversal Patterns
(Bearish Engulfing)
• - Double ended value
Ichimoku ValueCloud
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Ichimoku ValueCloud
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3 Bar Reversal
Patterns
(Evening Star),
SUN HAS SET
on this bull
Long Bullish
Golden Doji
Long Bearish
Ichimoku ValueCloud
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3 Bar Reversal Patterns
(Morning Star) – RISE
and shine, looking up
Bearish
Golden Doji or Long
Handled Hammer
Long Bullish
Ichimoku ValueCloud
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Ichimoku ValueCloud
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3 Consistent ValueCandles + Ichimoku
Cloud Trades
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ValueCandles + Ichimoku Trades
(Cloud Emerging)
- On 60 minute charts
- Move same direction with momentum
- 3 bar close outside cloud = confirmation
- TIP: Look for last kiss or continuation flag
on 15 minute chart
Ichimoku ValueCloud
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Ichimoku ValueCloud
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ValueCandles + Ichimoku Trades
(Cloud Bounce)
- Reversal Pattern on Spans A & B
- Particularly when price enters the Cloud
and reverse bounces at the opposite side
Span
- TIP: Look for reversal pattern on 1/3 size
TimeFrame
Ichimoku ValueCloud
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Ichimoku ValueCloud
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ValueCandles + Ichimoku Trades
(3 Bar Bounce Debit Spread)
- On 60 minute chart, After price “bounces” and reverses off the Opposite Span, and has 3 bar closes (away from span) above/below that point of inflection
- Sell an ATM debit spread : Buy the ATM strike (current price), Sell the strike at the Next Ichimoku S/R level
- Minimum 7 days out
- Go for 30-50% profit
Ichimoku ValueCloud
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Ichimoku ValueCloud
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3 Major Ichimoku ValueCloud Trading
Opportunities
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Ichimoku ValueCloud Trading Opportunity
(Go with ETFs) : Primarily Trend Trades
- Commodities - GLD, GDX, USO,
- Currencies -
- Sectors – IBB, XLE
- Foreign Mkts – FXI, EWJ, EWZ
- Leveraged – SSO
- Inverse – SDS
- www.ETFdb.com - ETF resouce website
Ichimoku ValueCloud
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Ichimoku ValueCloud Trading Opportunity
(Go with ETFs) : Primarily Trend Trades
- Trade primarily with Cloud Emerging &
Universal Trend Breakout strategy
- Indefinite holding period
- Cost Effective Diversification
- New Trading Room Focus
Ichimoku ValueCloud
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Ichimoku ValueCloud
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Ichimoku ValueCloud
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Ichimoku ValueCloud Trading Opportunity
(Off-Calendar) Credit Spreads
- Trade primarily with Cloud Bounce
strategy
- Still on weekly calendar
- Early in week – momentum on daily +
strong 60 minute momentum : +/-30°slope
- Late week – follow 11-Hour strategy
Ichimoku ValueCloud
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Ichimoku ValueCloud
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Ichimoku ValueCloud Trading Opportunity
(Universal Trend Breakout)
- Conversion Line/Baseline Cross
- Aggressive : 60 minute chart, run 2-4 days
- Conservative : Daily chart, run 2-3 weeks
- 1. at the “cross” – establish price level
- 2. look for 3 closes above, beware last kiss
- Can be enhanced with Momentum Trender
Pro
Ichimoku ValueCloud
![Page 56: Thomas Wood | MicroQuant Identifying Key Support and ...Value... · Ichimoku ValueCloud . Risk Disclaimer Trading or investing carries a high level of risk, and is not suitable for](https://reader030.vdocuments.us/reader030/viewer/2022021703/5e1667fbf3c9e1700963e1d0/html5/thumbnails/56.jpg)
Ichimoku ValueCloud
![Page 57: Thomas Wood | MicroQuant Identifying Key Support and ...Value... · Ichimoku ValueCloud . Risk Disclaimer Trading or investing carries a high level of risk, and is not suitable for](https://reader030.vdocuments.us/reader030/viewer/2022021703/5e1667fbf3c9e1700963e1d0/html5/thumbnails/57.jpg)
Ichimoku ValueCloud Q&A
![Page 58: Thomas Wood | MicroQuant Identifying Key Support and ...Value... · Ichimoku ValueCloud . Risk Disclaimer Trading or investing carries a high level of risk, and is not suitable for](https://reader030.vdocuments.us/reader030/viewer/2022021703/5e1667fbf3c9e1700963e1d0/html5/thumbnails/58.jpg)
Thank you for your attendance!
![Page 59: Thomas Wood | MicroQuant Identifying Key Support and ...Value... · Ichimoku ValueCloud . Risk Disclaimer Trading or investing carries a high level of risk, and is not suitable for](https://reader030.vdocuments.us/reader030/viewer/2022021703/5e1667fbf3c9e1700963e1d0/html5/thumbnails/59.jpg)
Ichimoku ValueCloud
![Page 60: Thomas Wood | MicroQuant Identifying Key Support and ...Value... · Ichimoku ValueCloud . Risk Disclaimer Trading or investing carries a high level of risk, and is not suitable for](https://reader030.vdocuments.us/reader030/viewer/2022021703/5e1667fbf3c9e1700963e1d0/html5/thumbnails/60.jpg)
Remember…
Divergences are Everywhere!!
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Ichimoku ValueCloud
Trend Trading / Support & Resistance
• Elegant way of identifying Present &
Future support & Resistance levels
- Combine with ValueBars/ValueCharts
- Highest probability Candlestick reversals
- Identify Optimum Support & Resistance
![Page 62: Thomas Wood | MicroQuant Identifying Key Support and ...Value... · Ichimoku ValueCloud . Risk Disclaimer Trading or investing carries a high level of risk, and is not suitable for](https://reader030.vdocuments.us/reader030/viewer/2022021703/5e1667fbf3c9e1700963e1d0/html5/thumbnails/62.jpg)
Ichimoku ValueCloud
Trend Trading / Support & Resistance
• Trade your favorite setups
– Multi-Day Trend Trades
– Identify Quality S&R for Reversals/Credit
Spreads
– Breakout Momentum Trades
– ETF Position Trades
![Page 63: Thomas Wood | MicroQuant Identifying Key Support and ...Value... · Ichimoku ValueCloud . Risk Disclaimer Trading or investing carries a high level of risk, and is not suitable for](https://reader030.vdocuments.us/reader030/viewer/2022021703/5e1667fbf3c9e1700963e1d0/html5/thumbnails/63.jpg)
Date: Wednesday, April 27th, 8PM est
Ichimoku ValueCloud Workshop $399
www.valuecharts.com/CLOUD
Ichimoku ValueCloud workshop
![Page 64: Thomas Wood | MicroQuant Identifying Key Support and ...Value... · Ichimoku ValueCloud . Risk Disclaimer Trading or investing carries a high level of risk, and is not suitable for](https://reader030.vdocuments.us/reader030/viewer/2022021703/5e1667fbf3c9e1700963e1d0/html5/thumbnails/64.jpg)
Date: Wednesday, April 27th, 8PM est
Ichimoku ValueCloud Workshop $399
Special Exclusive Members Webinar Price
???
www.valuecharts.com/CLOUD
Ichimoku ValueCloud workshop
![Page 65: Thomas Wood | MicroQuant Identifying Key Support and ...Value... · Ichimoku ValueCloud . Risk Disclaimer Trading or investing carries a high level of risk, and is not suitable for](https://reader030.vdocuments.us/reader030/viewer/2022021703/5e1667fbf3c9e1700963e1d0/html5/thumbnails/65.jpg)
Date: Wednesday, April 27th, 8PM est
Ichimoku ValueCloud Workshop $399
Special Exclusive Members Only Webinar Price
$197
www.valuecharts.com/CLOUD
Ichimoku ValueCloud workshop
![Page 66: Thomas Wood | MicroQuant Identifying Key Support and ...Value... · Ichimoku ValueCloud . Risk Disclaimer Trading or investing carries a high level of risk, and is not suitable for](https://reader030.vdocuments.us/reader030/viewer/2022021703/5e1667fbf3c9e1700963e1d0/html5/thumbnails/66.jpg)
Ichimoku ValueCloud workshop
www.valuecharts.com/CLOUD
Exclusive Member Price - $197
![Page 67: Thomas Wood | MicroQuant Identifying Key Support and ...Value... · Ichimoku ValueCloud . Risk Disclaimer Trading or investing carries a high level of risk, and is not suitable for](https://reader030.vdocuments.us/reader030/viewer/2022021703/5e1667fbf3c9e1700963e1d0/html5/thumbnails/67.jpg)
Date: Wednesday, April 27th, 8PM est
Ichimoku ValueCloud Workshop $399
Special Exclusive Members Only Webinar Price
$197
www.valuecharts.com/CLOUD
Ichimoku ValueCloud workshop
![Page 68: Thomas Wood | MicroQuant Identifying Key Support and ...Value... · Ichimoku ValueCloud . Risk Disclaimer Trading or investing carries a high level of risk, and is not suitable for](https://reader030.vdocuments.us/reader030/viewer/2022021703/5e1667fbf3c9e1700963e1d0/html5/thumbnails/68.jpg)
Date: Wednesday, April 27th, 8PM est
Ichimoku ValueCloud Workshop $399
Special Exclusive Members Only Webinar Price
$197
www.valuecharts.com/CLOUD
Ichimoku ValueCloud workshop
![Page 69: Thomas Wood | MicroQuant Identifying Key Support and ...Value... · Ichimoku ValueCloud . Risk Disclaimer Trading or investing carries a high level of risk, and is not suitable for](https://reader030.vdocuments.us/reader030/viewer/2022021703/5e1667fbf3c9e1700963e1d0/html5/thumbnails/69.jpg)
Divergence Trading
** Price chart & MQ momentum
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Divergence Trading
** Price chart & MQ momentum
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Fundamental Divergence Trade Setup
(Nice to have)
• 2nd momentum indicator – VBT, squeeze
Divergence Trading
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Divergence Trading
*** Point out VBT, Higher 3x T.F., S.R from
Higher T.F.
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Fundamental Divergence Trade Setup
(Momentum Move)
• Easiest to see… 20-25 bar move
• Harder… 25+bar “grinding” move
Divergence Trading
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Fundamental Divergence Trade Setup
(Top/Bottom divergence pattern)
• Divergence in ~ 12 bars
• Harder… sideways, move, may not work
Divergence Trading
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Divergence Trading
*** point out Momentum Move & T/B
divergence pattern
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How many Divergences do you see?
*** point out Momentum Move & T/B
divergence pattern
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Fundamental Divergence Trade Setup
(Boost chance of Success)
• VBT/squeeze is already “heading” in the
direction of the reversal
• The divergence is at a known
support/resistance level
Divergence Trading
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Divergence Trading
*** point out Momentum Move & T/B
divergence pattern
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Fundamental Divergence Trade Setup
(Stop Loss)
- Easy…
• Above the double/triple top high price
• Below the double/triple bottom low price
Divergence Trading
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Divergence Trading
*** point out Momentum Move & T/B
divergence pattern
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Divergence Trading
*** point out Momentum Move & T/B
divergence pattern
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Fundamental Divergence Trade Setup
(Stop Loss)
Harder…
• When the “divergence” fails. When the
momentum regains strength of original
move, and it increases to the point of
having more strength than 1st high/low.
Divergence Trading
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Divergence Trading
*** point out Momentum Move & T/B
divergence pattern
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Fundamental Divergence Trade Setup
(Profit Targets)
• ValueCharts/ValueBars : Yellow -> Yellow
• Neckline
• Fibonacci 50% & 61.8% retracements
• “Runner” for new opposite trend
Divergence Trading
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Divergence Trading
*** Profit Targets
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Divergence Trading
*** Profit Targets
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Divergence Trading
*** Profit Targets
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Divergence Trading
*** Profit Targets
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Divergence Trading
*** Profit Targets
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Divergence Trade Checklist
Identify a Momentum move : 20-25 bars
Look for Top/Bottom Divergence Pattern 10-12
bars
Check VBT/squeeze – histogram moving in
direction of reversal
Divergence Trading
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Divergence Trade Checklist
Is Divergence Pattern at Support/Resistance
level?
Identify Stop Loss levels – where is the
Divergence “broken” and no longer valid
Divergence Trading
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Divergence Trade Checklist
Identify Profit Targets
1. ValueCharts/ValueBars : Yellow -> Yellow
2. Neckline
3. Fibonacci 50% & 61.8% retracement levels
4. “Runner” for new opposite trend
Divergence Trading
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Divergence Trading
*** Bullish Divergence walkthrough
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Divergence Trading
*** Bearish Divergence walkthrough
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Intra-Day Divergences
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Intra-Day Divergences – tick, 2, 3, 5, 10 min
• Range-bound trading days
– Use high/low price of first 30 minutes of
trading day.
– Look for divergences at these S/R levels
Divergence Trading
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Divergence Trading
*** Range-bound : high/low first 30 minutes
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Divergence Trading
*** Range-bound : high/low first 30 minutes
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Intra-Day Divergences
• At support & resistance
– Previous days High/Low, look for divergences
Divergence Trading
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Divergence Trading
*** Range-bound : previous day high/low
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Swing Trading Divergences
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Swing Trading Divergences
• Utilize the 15, 30, or 60 minute chart
• Daily, Weekly support & resistance levels
– look for divergences
Divergence Trading
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Swing Trading Divergences
• Look for 3-4 day “runs” about 20-25 hourly
bars
• Watch for a 1.5-2 day about 10-12 hourly
bar turnarounds (divergence pattern)
Divergence Trading
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Divergence Trading
*** Swing Trades on hourly chart
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Divergence Trading
*** Swing Trades on hourly chart
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Divergence Trading
*** Swing Trades on hourly chart
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Want to master Divergences?
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Mastery Practice
• 1-2 minute charts of Crude Oil futures (CL)
or Gold (GC)
• Practice watching for Momentum moves
20-25 bars
• Identify Divergence Pattern (8-12 bars)
Divergence Trading
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Mastery Practice
• Actually write down entry point/price
• Execute your Profit Targets
• Identify your stop loss
• Did you make money?
Divergence Trading
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Divergence Trading
*** Mastery Practice ***