Ichimoku Charts: An introduction to Ichimoku Kinko Clouds

The author announces it right from the start, ichimoku does not work on units that are lower than the day. This remark is surprising when you have a little experience with ichimoku. The rest will be the same story, the author does more analysis than trading, at the end of the book you will not know how to trade at worst it will have confused you. Another author who talks about a subject without applying it on a daily basis…

🙂

The concept is excellent. However the book lacks the analytical depth and detailing required of such a concept.

Where is Steve Nison when you need him??

Nicole Elliot’s book on Ichimoku Charts (aka Cloud Charts) completely fails at methodically building up the reader’s knowledge of the theory, practical application, and utility of each component of the chart. Without a thorough grounding in the building blocks of Cloud charts it becomes impossible to interpret these charts and extract their value.

I was drawn to Cloud charts because of my great desire to find a chart that would incorporate extremely powerful Japanese Candle Stick analysis, but also “supposedly” have built in moving averages and even make use of Fibonacci number sequences. The former combination seems like it would make for a robust technical tool if only it could be explained / decoded using a modicum of plain english.

As someone who developed a real passion for technical analysis from reading the extremely well written works of Steve Nison and John Murphy, Nicole Elliot’s book completely fails to transmit any meaningful knowledge of Cloud charts to the reader.

I don’t even think the books title is appropriate as one could get the same depth of Nicole Elliot’s “introduction” or “pamphlet” on Ichimoku charts through a Google search of free articles on the web.

I still believe these charts hold real promise if the right author comes along to unlock their value for interested readers.

I think the book is a good introduction of the technical analysis using Ichimoku Kinko charts. Charts in colour are pretty good and clear. However I consider that it is just an introduction and not a profound analysis of this kind of study. What I consider more relevant and interesting in this book are the tips and explanation of the personal way the author analyse the markets. Her experience in the markets is of great value for any trader.
Anyway it is worthy reading this book since there is not enough material regarding Ichimoku.

great book, lots of useful info

waste of time!

A bit too brief regarding the various indicators that make up the Ichimoku; clouds are just a part. Plus not many ‘experts’ tie in waves and bar patterns but I concede that some might find that useful. The ichiwiki web site is far more informational.

Little info about Ichimoku, rather somewhat undigested ramblings about other technical indicatora that by and large have nothing to do with that system. A total loss. Poorly executed. The charts not even consistent in format. Sloppy work.

the best of the ichimoku books.

I bought this book after being disappointed with Manesh Patel’s book on the subject: Trading with Ichimoku Clouds: The Essential Guide to Ichimoku Kinko Hyo Technical Analysis. See my review there for an overview of Ichimoku Clouds.

Elliott’s book is much better, but it is not for everyone. This book is written for a very specific audience — professional technical analysts who want to understand what their Japanese competitors are doing. If that’s your situation, this is the book for you; otherwise look elsewhere.

Because of the book’s intended audience, it has almost no discussion of trading. It simply discusses the indicator and how a Japanese analyst would interpret it. If you work at the forex desk of a bank, this information will help. If you are the typical trader, it won’t.

Regrettably, there are no truly outstanding English books on the subject. If you can read Japanese or work with someone who does, you should just get Hidenobu Sasaki’s Ichimoku Kinko Studies (Toshi Raider Publishing 1996). Otherwise, as of 2010, this seems to be the best book on the subject available.

I’ll provide a brief overview of the book’s contents for those considering it:

After a brief historical overview in Chapter 1, the book spends Chapter 2 explaining how the charts are constructed. The information available on the internet is probably better, but one important difference this chapter brings out is that the Tenkan-sen and Kijun-sen lines are constructed as moving averages of daily midpoints (halfway between the daily high and low). Most websites and other books will tell you to construct them like you construct the Senkou Span — by taking the midpoint between the highest high and lowest low over the look-back period.

Chapter 3 covers the conventional Japanese interpretations of the cloud chart, leaving out newer approaches Westerners have added. Although you could get this information from many internet sites, it will generally not be clear which methods are the typical Japanese ones and which ones are more recent innovations. The book here stays on point and focuses on explaining how a Japanese analyst will look at the chart.

Chapter 4 is probably the most important and most useful chapter of the book. Unfortunately, it is somewhat lacking in detail. This chapter covers the Wave, Price, and Time principles. These principles are the Japanese versions of wave analysis, price projections, and time retracements. The coverage here is substantially better than anything I’ve found elsewhere, but the level of detail is only enough to understand what a Japanese analyst would do. I don’t feel confident that I could actively use these methods with just the information in this chapter.

Chapter 5 provides six longish examples of performing a technical analysis using Ichimoku techniques. Sticking with the book’s goal of teaching you how a Japanese analyst would approach a chart, each example is a single snapshot. The book does not show you how things turned out nor does it show you how an analysis would be changed after new bars were added.

Chapter 6 builds on Chapter 5 and focuses on analysis of volatility for option strategies. This chapter contains information that isn’t available elsewhere, but outside of a handful of professionals, I can’t see it being generally useful. Very few retail traders use vanilla options in spread strategies; even fewer will make use of the exotic knock-in/knock-out options that Elliot references in several examples.

A beautifully presented book. Not sure how effective the clouds are at generating profitable trades. I suspect these are similar to other strategies which fail the profitability test.