How You Can Build Patience And Discipline With Ichimoku

How can we use the Ichimoku indicator for our deals?

Many traders forego high probability set-ups and just want to get in on the action so they take low probability set-ups. Ichimoku can help you with that.

Finding a great trading system is only half the battle. The other half is developing the discipline and patience to only take the most favorable trades according to your systems so you’re not chasing price action. Today you’ll learn how Ichimoku allows trends to stabilize before you enter so that you’re not entering a trade right before it corrects against you.

Most traders want to have a strategy that brings consistent results. However, if you speak to many traders, the one thing that is missing in their trading is consistency. This is shown by a great month followed by a poor month or a trader not feeling like he is getting a footing with his strategy.

Developing Patience

The best analysis in the world won’t provide you the benefit you seek if you don’t have the discipline or patience to wait for the best set-ups. The problem that a lot of traders run into is that they would rather feel the action of being in a trade than wait for a great set-up that aligns with their strategy which is costly. Another problem that traders run into is not having a form of analysis that allows them to see when an appropriate time to enter a trade is present, even if the trend is clear.

One reason for Ichimoku’s popularity is the indicator’s ability to display the trend and opportunities of when to enter the trend. With Ichimoku’s multiple aspects for entering a trade, you’re encouraged to avoid counter trend moves with the cloud and wait for the confirmations of the trend with the lagging line and moving averages.

Ichimoku is a great tool to help you see when a trend is reversing based on when price and the lagging line break through the clod. On the chart above, the EURJPY trend has shifted from a great buy trade to a potential reversal that we hope to catch with this trade. Outside of Ichimoku, there is a price pattern call Bearish Three Drives that is always developing on this pair. However, trend reversals as displayed with Ichimoku are a riskier trade so it’s best to keep your stops rather tight in case the analysis is wrong.

Source: Bloomberg Pro Terminal

Junior Trader Stefan Panteleev