It’s important to know, this knowledge is completely different from what you know about Ichimoku. Ichimoku not only revolves around 5 basic lines on the price chart such as Tenkan, Kijun, Chikou, Kumo; knowledge about Ichimoku is built based on 3 theories that I shared in this series of articles.
Ichimoku wave theory: The 3 basic waveforms include:
1. Wave I.
2. Wave V.
3. N wave.
Called 3 basic waveforms but it is like Ichimoku arithmetic theory, each component is related to the other components. The following figure will help you to understand the relation of the 3 waveforms:
Looking at the image above, you can see that wave I is part of wave V, then wave V is also part of wave N. Wave I is either an impulse or a correction in the terminology used by traders using price action. .
Wave V is a combination of one impulse with a correction, or two impulses at the same time (the second impulse reverses the first impulse).
The N wave, which is the most complex, consists of a correction in between the two impulses. Wave N starts with an impulse, the other two are customizable but ends with a higher high or a lower low. It can be understood that wave N is a new trend forming on a small scale, so if you find that wave N has not made a higher high or lower low, the market has changed in wave structure.
You continue to see an example to fully understand the theory of 3 basic waveforms
The chart is already marked with waves I. You start counting waves V and N on the chart as follows: from the left, ABC forms wave V; ABCD is wave N. But wave N ABCD has point D not higher than point B, this wave N has changed wave structure.
The market appears wave I DE, combine the old wavelengths you have a new N wave BCDE. Don’t miscount wave N as CDEF guys because wave N must start from an impulse. After continuing to form impulse wave FG, you see a new wave N appearing DEFG.
Wave N continues to move in a down direction, but on HI wave, the market can no longer make a lower low. The story now is similar to the ABCD wave we observed from the beginning, that is, the market is changing its wave structure. This signal could be a reversal or a sideway in the future, but surely the market cannot continue the downtrend because there has been a change in the structure of wave N.
Ichimoku wave theory: applied to market trading
Once you have a solid understanding of wave theory, you can now combine trading techniques for a complete trading strategy. This is actually quite easy because the Ichimoku wave theory already gives you a basic idea of the trend, you just need to find one more tool to assist in finding entry or exit points. For example, when you find that the rising N wave does not make a new top, you should use an additional indicator to confirm the possibility of a bearish reversal, accompanied by a candlestick pattern confirming that the entry point is basically completed a strategy. Simple trading method.
If you want to increase the level of using Ichimoku, you can refer to the Ichimoku arithmetic theory that I introduced in the old article. The Ichimoku arithmetic section introduces the market reversal point usually according to the 9-17-26 cycle rule, apply this number of cycles to the wave calculation to determine the exact time of the reversal.
Now, don’t read any more, try dragging the mouse up, review the chart I just sent and apply both number theory and Ichimoku wave theory to see if it is correct.
According to tapchibitcoin.vn/traderviet
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