Bitcoin & Ichimoku
- Le 03/02/2019 à 19:06
- Dans Billets techniques ICH
Bitcoin & Ichimoku
Following frequent requests concerning the setting of Ichimoku to use for crypto currencies, I chose to show you with charts the difference between the original setting and those that appear most frequently. At the end, I reported the analysis I made for a client with the traditional Ichimoku setting.
The parameter query is based on the fact that crypto currencies quote 24 hours a day. Therefore 9-26-52 would not be relevant.
We are wondering about an asset that is constantly quoted but no one has asked the question of changing the parameters on the Forex which works 5 days out of 7 continuously compared to stocks that quote 8h (CAC) 6h (US). ... and raw materials that can only quote a few hours per day.
I will only point out that the original Ichimoku parameters that were created from daily prices are just as effective on any time frame whatever the asset.
Why will it be different on Bitcoin?
Let's look with charts at these differences in settings. I chose the ones that come back most often that is: 20-60-120 / 30 and 10-30-60 / 30. The last one is close to the original 9-26-52 and it is therefore an insignificant modification (LT only)
I present you these three settings on 3 time frames : Daily, Hourly and M15.
For each TF, I put the chart with the original setting between the two modified parameters charts so that you can compare them more easily.
Chart 1 - Parameters 10 - 30 - 60 / 30
Between these two charts, the differences are minor and therefore the change of parameters is irrelevant (green rectangles).
Chart 2 - Parameters 9 - 26 - 52 / 26
On the other hand with this other setting, the information is quite different > red circle and rectangle. Note that on the chart bottom (red arrow) prices find the Kijun as support while on the chart below, the Kijun is much higher and useless. In addition, a twist is apparent which may suggest that prices could continue to evolve more or less laterally in order to fetch this weak passage to cross and reverse this downward trend. Attention, it is an hypothesis not a certainty but it opens the field of the possibilities of action. While on the chart below, it is rather a very thick cloud that is present.
Above, the fact that prices do not pass the twist (red rectangle) is an indication of the lack of possible rise. The Lagging Span (red circle) faces a double resistance (Kijun + SSA) against a single Tenkan below.
Chart 3 - Parameters 20 - 60 - 120 / 30
Chart 4 - Parameters 10 - 30 - 60 / 30
The major difference here is the Lagging Span in Rectangle 3 which has not yet broken its Kijun and therefore does not validate the rise associated with the prices that find the cloud in resistance. While on the chart below the Lagging Span validates the rise and prices penetrate the cloud. The Kijun has a bullish slope accompanying the bullish movement.
In the green rectangle 2, the passage of the twist is different and less clean than on the chart below.
Chart 5 - Parameters 9 - 26 - 52 / 26
On the chart below, no price-passing twist (rectangle 2) as above. The Lagging Span is far from its Kijun (3) > no information. And the market appears bearish because prices are below the cloud AND the Kijun (4). As for the two rectangles 1, the information is totally different.
Chart 6 - Parameters 20 - 60 - 120 / 30
SHORT TERM M15
We realize that the more we go down on the short TF, the more the differences are important. The setting of the chart below which until now was insignificant gives a very different information with the original setting.
Chart 7 - Parameters 10 - 30 - 60 / 30
In rectangle 1, the buy signal is given only on the 3rd candle by breaking the Kijun. In rectangle 2 the signal is the same but doubtful because it is in the cloud.
In circle A the prices are below the Kijun so bearish while they are bullish on the chart below.
Chart 8 - Parameters 9 - 26 - 52 / 26
Finally, the chart below gives much later information on possible entry points.
Chart 9 - Parameters 20 - 60 - 120 / 30
From my point of view, it seems to me totally useless to modify the parameters, especially in the short term. Reading and signals are distorted.
On the charts below you can read a classic analysis with the original setting. The relevance of the original parameters is well established.