FREE FOREX STRATEGIES

Advanced system #19 (IKH-HA Strategy)


Submitted by Gary Sharp
FXPT - SharpForex

IKH-HA STRATEGY

This strategy is based on Ichimoku Kinko Hyo chart trading method, and combined with the ichi360 Monitor and Heiken Ashi candlestick chart method.

Anyone not familiar with Ichimoku Kinko Hyo can visit http://www.kumotrader.com/ichimoku_wiki/index.php?title=Main_Page for a comprehensive introduction.

The ichi360 Monitor can be downloaded at http://www.ichi360.com/?p=1594 free of charge. Other indicators listed below are part of the MT4 package.

If you are not able to spend the whole day at the screen, and want to be able to set-and-forget, the IKH_HA Strategy provides a good solution PROVIDED you also employ the use of a trailing stop.

Timeframe: 4 hour
Currency Pair: Any pair
Risk Factor: 2% of account balance
Stop Loss: Use Kijun Sen +/- ATR/6 buffer for trailing stop

INDICATORS:
Ichimoku Kinko Hyo 9,26,52
Heiken Ashi
Multi Timeframe Indicator - ichi360 Monitor (Download: ichi360_Monitor_V2.zip)
ATR 14

MONEY MANAGEMENT:
Lotsize is determined by money management with risk limited to no more than 2% of account balance per trade. This is achieved by (1) calculating 2% of the account balance, (2) calculating the dollar value between the current price and the Kijun Sen – ATR/6 for a long position or Kijun Sen + ATR/6 for a short position, and (3) dividing 2% of the account balance by the dollar value in (2) above. The result is the number of lots that can be traded without exceeding the 2% risk factor if the stop-loss is hit. The “ATR/6” component adds a buffer to the stop-loss to allow for noise.

CURRENCY PAIR SHORT LISTING:
Once each day, or every 4-hours if you prefer, check the ichi360 Monitor for each currency pair to select suitable currency pairs for short listing. This is a step that MUST be performed before a currency pair can be considered for trading, and helps eliminate bad trades. The ichi360 Monitor MUST be 80% positive (13 or more up arrows) or 80% negative (13 or more down arrows) for a currency pair to be added to the short list.

TRADE ENTRY – LONG POSITION:
· Price candle MUST completely clear top of the Kumo and close above the Kumo;
· Tenkan Sen cross up above Kijun Sen;
· Chikou Span MUST be above the price curve and trending upwards;
· Senkou Span A cross up above Senkou Span B; and
· Heiken Ashi candle MUST be green.

TRADE ENTRY – SHORT POSITION:
· Price candle MUST completely clear bottom of the Kumo and close below the Kumo;
· Tenkan Sen cross down below Kijun Sen;
· Chikou Span MUST be below the price curve and trending downwards;
· Senkou Span A cross down below Senkou Span B; and
· Heiken Ashi candle MUST be red.

EXIT STRATEGY:
This is essentially a trend-trading strategy so whilst we want to cut losses short, we also want to allow profitable trades to run to their maximum potential. Exit is achieved in one of two ways:
· Trailing stop trigger, or
· Tenkan Sen / Kijun Sen cross in the opposite direction of the trade.

The following screen shot shows all the criteria that must be met in order to enter a long position. It also shows the results of a previous short trade that resulted in a 416 pip gain.

Ichimoku Kinko Hyo can appear to be complex and intimidating to those not familiar with this highly reliable charting system, but in reality it is an incredibly easy method to master. Once you become familiar with this method you may wonder how you managed trade without.

Cheers,

Gary Sharp
FXPT - SharpForex

hummmmm.... ilove this, but how do u determine your SL and trailing stop value? not only that, the ichi360 is not showing on my platform whenever i load it what do i need to do? Am using MT4 platform

I am not sure what you are doing wrong with the ichi360 Monitor. It should be as simple as downloading, saving to the MT4 indicators folder, and attaching to the chart. The stop and trailing stop is tagged to the Kijun Sen (blue line), plus or minus a buffer to absorb market noise. The buffer is equal to ATR/6.

Much ado about nothing. Ichi is okay , and it does work, but it is very strict on rules, misses a lot of good trades , and is very time consuming .

Stick to the simple Slingshot , BUT make sure you use it with Binary Options only.

A perfect match.

George F .

George F,

Why do you like Binary options so much. Can t say I know much about that.

Insider

I have Ichi360 monitor V2 and pasted it in the experts folder of MT4and restarted MT4 but still when I try to apply it for the chart it is not working… any help is appreciated.

the ich360 monitor needs to be adjusted for your screen. I had the same problem and tweeked the placement found in the settings.

@ George F. I would like to thank you for pointing out binary options to us. Didn't think i had a gambling problem while trading forex, but binary options led me to stockpair dot com ....now that is gambling. literally horse racing for stocks.

@George F,

I have been trading with ICHI strategy for more than two years now and from my experience its best to trade all currency pairs offered by your broker, Trust me This has given me more than four trades a week consistently and also I use TF H4 considering this I feel that it is reasonable.

Cannot say that I agree with @George F as far as IKH being time consuming and missing a lot of trades. Last week (29/08/2011 - 02/09/2011) I completed 30 trades over 22 currency pairs. Gross profit $2,217 against $381 gross loss, or a 5.79 profit factor. Risk factor of 2% on account balance. Net weekly result of 91.5% on account balance...low risk, high return. I spent an average of 1-hour each day at my computer screen. Much ado about nothing?