We are pleased to announce that CTI has a new funded trader that has successfully passed the evaluation after taking on our managed forex account. What makes our funded trader, John Huntington, stand out even more is that his strategy includes an indicator that is rarely used by traders. The Ichimoku clouds!
The Ichimoku clouds can be applied in just about any market, like every technical indicator. However, it is quite special in that you will have a special edge with Asian markets, notably the Yen markets, if you keep an eye on it there. Effectively, you are doing yourself a disservice by avoiding the clouds with your Yen pairs, some would argue!
— Some of you, whether you have a managed forex account or not could try it. If you do not currently have a managed forex account, learn more. Perhaps you could be the next trader that passes the managed forex account evaluation that I'll be writing about. 🙂 —
To truly trade Yen assets properly, you can’t avoid the Ichimoku because many Japanese traders – the main Yen traders, or traders in the Asian session – will look for key cloud levels as they will look for key support/resistance levels, supply/demand zones, Fibonacci levels and moving average levels.
The Ichimoku cloud has its own unique strategies you could trade on based on the cloud, or you could use it concurrent with other indicators. However, for the purposes I outlined above you simply need to treat it like a moving average.
Where support and resistance are concerned, a thick cloud a strong level and a thin one is weak.
In the technical analysis community, the Ichimoku cloud divides the community. Some love it, some loath it and some never heard of it… when they do, they fall into one of those 2 camps.
The ones that love it tend to simplify it and the ones that hate it tend to fail to simplify it. At first glance, it looks like a messy indicator, but there are lots of settings that are not commonly used.
In case you would like to include Ichimoku in your funded trader journey, try it in your managed forex account, or simply want to give it a try keep on reading:
Overview of the Ichimoku Clouds
When you set the Ichimoku clouds you’re going to have the cloud itself and various lines.
Firstly, make your life easy and go to the settings and disable the Chinkou Span, Senkou Span A, Senkou Span B, Tenkan-sen and Kijun-sen lines. You will not be using these.
You might notice the cloud has 2 different colours. The notion here that one colour indicates that price will be bullish and the other indicates it will be bearish. Some Ichimoku cloud analysts like to use this. However, most do not.
For simplicity, make them both the same colour, I usually recommend some shade of blue (depends on your preferences and trading platform).
Common Trading Strategies
As I mentioned earlier, you could make an entire trading course on the Ichimoku Clouds. However, I will drop a couple of strategies that are common among cloud traders you cloud try on a demo, potentially.
There is what is called the Kumo, or Cloud, breakout. This is when price pierces through the cloud. You can use another technical indicator to confirm (usually this is a trend change).
Another version of this is when price is in consolidation within a cloud and is looking to “explode” in one direction.
Another common strategy is more of a risky one and may require you to be more in touch with fundamentals (works best with Yen pairs). This is when price and the cloud are far apart, you would generally expect price to gravitate back to the Ichimoku chart and look for signals for it to do so. The only risk here is if the fundamentals support the divergence, in this instance, the cloud will move towards price.
Words of Wisdom from a Funded Trader
As you will see in the interview, as many new traders, a common mistake is to believe it is a quick rich scheme. It is easy to see why many see it this way with the continual advertisements it gets on social media.
Unsurprisingly lots of these take on a managed forex account and wonder why they aren't in the Bahamas with models because someone showed amazing results using a demo account on Instagram.
In fact, it goes deeper. Some institutions provide funded trader programs with very skewed terms. Though, those who do not understand the industry well would be none the wiser, so how would they know?! Well, there is a way to know how to tell which managed forex accounts are authentic and which providers have your best interests at heart as we have written about in prior entries.
However, there is some value in them because those who stick with trading, blow a few accounts and are happy to spend time crafting a good system by spotting patterns through many trial and errors tend to be the ones that stick with successfully for the long run.
Of course, the main beast to overcome in trading is one no one expects: psychology. There are entire books written on it. In fact, that is why some trading floors have performance coaches and why Billions wrote one into the top hedge fund in the story. With that in mind, our psychology and mentoring programs are our equivalent to that!
Though, the Mastermind helps you if you're into learning all this stuff from the ground-up!
Without further ado here is John’s interview!