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#Bitcoin #Cryptocurrency #IchimokuCloud #TechnicalAnalysis ● tipjar
3PCQX1AxDQiAJxBpo5zgQqVBQ9oKrMa6Qb ● Advisor for Experty and
AltcoinExchange
Jan 17 · 21 min read

‘Toshimoku’s Trading Tips & Tricks

Here’s how trading begins and evolves for most successful traders:

Losing all your money every trade

Depending on how quickly you adjust your risk management style, this
phase can last for months, or even never end. FOMO helps encourage
this phase by selling bottoms and buying tops. You risk your entire ac-
count on one trade trying to win the lottery. This is closer to gambling
than it is trading.

Breaking Even (BE)

Phase when risk management begins to work but starting to become too
risk averse. You become very good at analyzing downside risk but not
good enough at understanding the appropriate amount of risk to allow
for higher gains.

Small Wins

System is working. Risk management is working. Emotions are prevent-

ing trades from running their course because you’ve never been on top of
a trade before. You close the trade early by moving stops too much, not
using a target that is large enough, or you panic close. Often, it takes
many small wins to realize what is wrong with this style of trading.

Big Wins

God Tier of trading which takes most people years to achieve. You still
have losing trades and BE trades but a majority of your trades are large
winners, which far outweigh the losers. You have variable position sizing
appropriate for risk. You take multiple positions and close 50–75% of
your positions at various predetermined levels while letting some of the
winner run.
It’s important to spend your time losing money, learning a trading sys-
tem on your own, and establishing rules for your trading style.

Remember — Big losses are always more di2cult to recover than small

losses!

. . .

What is Your Mindset?

Many people, including myself initially, buy cryptocurrency, then follow
price very closely, which is a gateway to essentially becoming a day
trader driven by emotions. Trading, or active management, is not for
everyone. In fact, it’s really not for most people. Over 90% of all traders
lose money and will not be able to beat simple a buy and hold strategy. If
you can’t beat buy and hold, your not only losing money, but you’re wast-
ing time — which is even more valuable.

Investing

Many use this buy and hold (hodl) strategy for bitcoin which typically
occurs over months or years. Some traders use this for alts but I don’t
recommend it for most alt coins. This is a passive strategy which often
beats active management for most people, especially new traders.

Trading
This is an active management strategy that can occur over any timeframe
but often occurs over minutes, weeks, or days. Generally, this process in-
volves a few steps where Technical and Fundamental Analysis can be
used.

• Recognition

What do high probability trades look like?

How do I Xnd them?

Which indicators, oscillators, or chart patterns on which timeframe do I

trust for actionable signals?

• Entry, Exit, Stop Loss

Using my system;

where do I enter the trade,

where should the target/exit be,

how big is my risk?

• Execution

Following through with ideas bound to your system. Many trades spend
time analyzing a market they never trade. Paper trading or back-testing
is great for testing your system, but at some point you need to actually
put money on the line with your ideas. The sooner you have skin in the
game, the better.

• Trading Size

Determining trading size can take Xnesse but can also be a Xxed percent-
age on every trade or based entry type,

I’m going to trade 10% on each trade

I’m going to trade 20% on chart pattern entries and add on pullbacks
or, surrounds a key target/support/resistance is established.

There is heavy support around 10,000 based on x, y, z. I’m going to place a

majority of my bid at or below 10,000 but I also want to place a smaller per-
centage of my bid above 10,000 to make sure I get an entry.

. . .

Where Should I Chart?

For simplicity sake, all charts in this guide will be from www.trad-
ingview.com. It’s a free site and you don’t need a pro account to be a suc-
cessful trader. Other charting options include:

• https://cryptowat.ch/

• https://bitcoinwisdom.com/

• https://www.coinigy.com/

. . .

Where should I trade?

Highly dependent on citizenship and the KYC/AML process. Here are
some options:

• Coinbase/GDAX

• BitXnex

• Bitstamp

• Bitmex

• OKEX (formerly OkCoin)

• Gemini

• Kraken

• Poloniex
 • Bittrex

• Binance

• 1broker/1fox (soon)

• AltCoin.io (soon)

• QuadrigaCX (Canadian)

. . .

Where Should I Find Key Market

Information?
Market Capitalization Tables

• https://onchainfx.com/ (my favorite)

• https://bravenewcoin.com/market-cap/

• https://coinmarketcap.com/

Heat Map http://cryptomaps.org/

https://bitcoin.clarkmoody.com/tickers/

https://bitinfocharts.com/

https://data.bitcoinity.org/

. . .

Finding The Best Timeframe

There is no best timeframe for any market or coin at a given time. The
market is euid. Higher timeframe signals and ideas also take precedent
but that does not mean there are perfectly actionable signals with high
probability trades on lower timeframes. It’s important to scan multiple
timeframes and judge trades appropriately.
Lower timeframe trades often have a smaller upside or downside
whereas higher timeframes have a larger upside or downside. I see
many new trades on low timeframes making multiple trades when
instead they need to be making fewer trades on higher timeframes.

For alt coins, especially newly listed coins, there will be plenty of action-
able signals on low timeframes. When $PASC was released, it had excel-
lent signals on the 5 minute timeframe.

$DOGE and $LTC on the other hand have very clear actionable signals
and trends on the weekly timeframe. Mainly because they have been
around for so long, relative to other alt coins. That also means these mar-
kets move relatively slower than newly released coins. Knowing the
speed of the market is critical for determining the correct time-
frame. When the market is swinging violently, a lower timeframe is of-
ten more appropriate than a higher timeframe to determine better
entries and exits.
 . . .

Candles
A candle consists of a body, upper/lower wick, and color. If the open
price is lower than the close price, the candle will be green. If the open
price is higher than the close price, the candle will be red.

The opens/closes will be determined by the timeframe of the chart. On

an hourly chart, each candle represents one hour of data. Candle closes
occur somewhat variable depending on the exchange or charting web-
site, as well as timezone. There is no true standard for crypto since it is
24/7, although you’ll Xnd that most charting sites have identical candle
close times.
Single candle patterns or groups of Candle patterns can be found within
price structure to add or subtract from coneuence of the current trading
idea. As with any pattern, there are continuation or reversal candles or
patterns also known as bullish or bearish candles or candlesticks. A key
part of mastering candle patterns is simple pattern or fractal recognition.
 . . .

Heikin-Ashi (HA) candlesticks

HA candles use open and close data from the previous period, and open
and close data from the current period.

An open and a close above the previous period suggests strong momen-
tum of the given trend. An open and a close within the bounds of the pre-
vious period suggests a slowing of trend. A color eip from green to red or
red to green indicates the possibility of the beginning of a new trend and
the end of the previous trend. These eips in signals should be considered
a long or short entry signal.

Typically, on the 3rd or 4th same colored candle, the local top is also
breached, adding coneuence to the entry signal. A SL is placed either be-
low a momentum-less candle such as a spinning top or doji, or, below the
Xrst opposite colored candle’s wick (below).
 . . .

Bill Williams Fractals

Logic similar to HA candles, slightly more lagging than HA. A bull fractal
consists of a low-high-low candle pattern whereas a bear fractal consists
of a high-low-high candle pattern. A bull trend should not break bear
fractals and a bear trend should not break bull fractals. More info here.

. . .

Point & Figure (P&F) Charts

A rarely used form of charting that was Xrst developed by “Hoyle” in
1898 with an emphasis on the closing price. This form of charting is used
for measuring moves with Wyckom structure and is not based on time but
rather price action.
 . . .

Indicators
With indicators, it’s important to remember that there are more which
tell you less and only a few which tell you more. I prefer indicators
which draw themselves, use math, and avoid my own biases.

For this reason, I lean heavily on Ichimoku Cloud, Pivots, and Moving Av-
erages. I tend to avoid entities like Elliot Wave which are very subjective
and easily edited with far less actionability.

. . .

Ichimoku Cloud
Useful for: Trend Determination, Entry Signals, Exit Signal, Re-entry
signals

Do not use when: market is clearly trend less and sideways. In these in-
stances, use Bollinger Bands or Chart Patterns.

Here’s a primer on my crypto settings and why they are dimerent than
default.

For alts, backtesting has shown that on the 1D timeframe, 10/30/60/30

gives a superior entry and exit signal compared to the doubled settings.
This is likely because alts have very explosive moves relative to Bitcoin, a
more mature market with a larger market capitalization. In other words,
the alt markets usually move faster than bitcoin.

Entry Signals — in order of importance

1. Price Above/Below Cloud — Gold standard of determining bullish

or bearish trend on any given timeframe.

2. Bullish/Bearish Cloud — Shows whether or not there is a bullish or

bearish leaning future.

3. Bullish/Bearish TK Cross — Very similar to EMA crosses.

4. Lagging Span Position Above/Below Price/Cloud — Many cloud

traders ignore this entirely. I use the LS when i am on the fence
about opening a position or not. The LS can save you from taking a
suboptimal position, especially when price is essentially sideways.
Exit Signals

1. TK Cross

2. Other — Bill Williams Fractals, HA candlesticks, Horizontal Levels

Re-entry Signals

• TK Cross/Recross (yellow)

A classic Ichimoku Cloud entry includes all signals matching either bull-
ish or bearish. When a bearish TK cross occurs above the cloud, this
should not be considered a short entry signal, but rather, a long
close signal. This is only a weakly bearish sign. A TK recross above cloud
is an extremely bullish predictor of future price action and should be
seen as a high probability long re-entry.

• Kijun Bounce
The Kijun is essentially the mean of any given trend. Ichimoku Cloud
prefers everything to remain in equilibrium. When price moves faster
than the given timeframe’s Kijun can keep up with price, the Kijun moves
farther and farther away.

The Kijun bounce occurs when price returns to equilibrium and then
continues the current trend. This can also be thought of as a correction
or a test of support.

Kijun Bounces can occur multiple times on any timeframe, the higher the
timeframe, typically the larger the correction. For this reason, I always
consider orders on or around the Kijun a safe entry. No matter how far
price is from Kijun, it is likely to return and test that level at some point.

If I miss an ideal entry, or miss a trade entirely, my default entry for a

trend is always the Kijun. Instead of FOMOing in 100%, place a higher
percentage of your trade size on the Kijun instead. Keep in mind, this is a
dynamic support/resistance level and will need to be adjusted as it
moves with price.
 https://www.tradingview.com/x/1jtf85Fb

• Edge to Edge (E2E) Trades

Entry signal: when a candle close occurs inside the Cloud, you can with
reasonably high probability expect price to reach the other end of the
Cloud. The larger the Cloud, the larger the payom. I think of this as the
cloud edges representing hard support/resistance. Should that break,
the remaining support/resistance is the opposite end of the Cloud. These
can occur on any timeframe, higher timeframes always better.
This example occurred on the weekly bitcoin chart and signaled the end
of the bear market. The other option illustrated here was a bearish kijun
bounce signalling continuation of bear trend. Although this took weeks
to complete, the E2E target remained valid. Another key aspect of E2E
trades are there predictability and actionability. When they appear and
then occur, you know exactly what you should be doing. Although I’d
consider E2E trades high probability, you should still use appropriate
stops just as you would any other trade.

E2E trades often occur after a TK cross as well and can either overshoot
or undershoot the opposite edge of the cloud.
Here are a few more examples
 • C-Clamp or TK Disequilibrium

Again, Ichimoku cloud prefers everything to remain in equilibrium.

When the TK lines are spread far apart, this signals price moving quickly
in one direction and can be thought of as an overbought/oversold indica-
tor. For this reason, these will always represent counter-trend trade
opportunities.

These trades have increased risk, but also increased reward, and usually
have better payom when they match the macro trend over the micro
trend. In other words, trying to short a bull rally usually means you get
bulldozed unless your entry is near the exact top, easier said than done.
However, an oversold c-clamp occurring during a bullish macro trend
has a much better payom.
C-Clamps are often accompanied by other reversal indicators like a bear-
ish divergence, rising/falling wedge, or head and shoulders.
The resolution of a C-Clamp is often the kijun, where then, a kijun
bounce can occur.

. . .

Bollinger Bands — aka My Favorite

Sideways Indicator
• One standard deviation above and below the average. As price con-
solidates, BBands tighten, a break above or below bands constitutes
a BBand breakout, or entry signal.

• Default Settings= 20, built to be used on daily timeframe on legacy

markets.

• 30 = captures more data, may be more appropriate for bitcoin and

cryptocurrencies which are 24/7 and not 5 day a week markets (20
 days a month)

• Example

• 14 = quicker setting which on the 1D timeframe captures two

weeks of data. Appropriate for some market conditions where a
faster signal is needed.

There is often a fake out break out of bands in the opposite direction and
for this reason, BBands should not be used alone for trading decisions.

Walking The Bands

• Can occur to represent strong bullish or bearish continuation

• Often a leading indicator of price action to come

 • Bollinger Band Width (BBW)

QuantiXes the size of squeeze and is useful for comparing previous

squeezes with active squeezes. If a current squeeze is active, I often look
to the most previous squeezes to determine what a reasonable size of
squeeze should occur.
• Follow John Bollinger on twitter — @BBands

. . .

Moving Averages — MA/SMA/EMA/TEMA
• Settings — 50, 100, 200, any 2 or more values

• A fast, low moving average, ie 50, closing above a slower moving av-
erage is a bullish entry signal. Closing below a slower moving aver-
age is a bearish entry signal.

• A slow, high moving average, ie 200, closing above a faster moving

average is a bearish entry signal. Closing below a faster moving av-
erage is a bullish entry signal.

• Golden Cross = 50 breaks above 200 — Start of Bullish Trend

 • Death Cross = 50 breaks below 200 — Start of Bearish Trend

Additional EMA Strategy Explanation

. . .

Pivot Points
• Settings — Daily, Weekly, Monthly, Yearly

• I prefer to use high timeframe pivots like monthly or yearly, regard-

less of the current timeframe chart I’m using. For many alts, only
the monthly or lower pivots are available and are therefore less
reliable.

• There are also multiple types of pivots, I stick with traditional most
of the time.

• Pivot Point Math — uses previous period high and low to determine

support/resistance levels

• Each pivot is calculated and prints at the beginning of the selected

period. The yearly pivots print on January 1st and remain the same
for the entire year. Monthly pivots are recalculated at the end of
each month and print at the beginning of each month.
When the R5 yearly pivot is broken, I rely on monthly pivots for further
support/resistance targets.

Pivots can also be used to predict price action based on price movement
of previous moves. The idea here was that if price hit the R3/S3 monthly
pivot with the Bollinger Band squeeze of this caliber, it would also do it
again.
 . . .

Fibonacci Retracements and Extensions

• Fibonacci retracement levels can be drawn from the extreme high to
the extreme low for any price movement. Within this price range,
static support/resistance lines are drawn, and can be thought of as
Potential Reversal Zones (PRZ) for price. These are levels that
traders often use to open or close trades, making them more
consistent.

• Fibonacci retracements also include Fibonacci Extensions which

give additional support/resistance above or below the extreme high
to an extreme low of any price movement, the 1.618 Xbonacci ex-
tension being the most widely used.

• 50% of the entire distance between established support and resis-

tance is a key zone. Any large price move will retrace at least 50% of
the move and make a decision from there. This is known as Dow
Theory.
You can use Xbonacci retracements and extensions for the macro or mi-
cro trend, or even a signiXcant price movement on a lower timeframe.

. . .
Harmonic Patterns
• Harmonics can be identiXed once three points form and can be ad-
justed as price meets or breaks those levels. The fourth point can be
deduced based on the harmonic value.

• To draw: Find a double top or double bottom. Then Xnd the ex-
treme high or low and project or identify the 4th point, an extreme
high or low. These can be found on any timeframe, but higher time-
frame identiXcation is always a more realistic signal.

• The target I use for all harmonic pattern completions is the

50%-61.8% zone from points A to D or, diagonal resistance from
points A to C.
 . . .

Pitchfork
• The pitchfork is drawn from an extreme high or low to another ex-
treme low or high with an anchor point being a previous extreme
low or high. The median line (red) gives the expected mean of the
trend. Price will continually attempt to return to this diagonal.

• Each diagonal of the Pitchfork can be thought of as a potential re-

versal zone or support/resistance line. The upper blue diagonal
zone being ‘most overbought’ or the top bounds of the trend and
lower blue diagonal zone being ‘most oversold’ or the bottom
bounds of the trend.

• To draw: look for three points, an extreme high/low, and a swing

high and low.

• BTC Chart Example

• Multiple pitchforks can be drawn within any given trend. A pitch-

fork should be considered valid if support/resistance of price
matches the diagonals once the pitchfork has been drawn. Do not
try to Xt the pitchfork to price, but rather, pick the anchor points
and decide on validity.

Examples
 . . .

Fractals
 • Fractals can be any repeating pattern on a price chart for an asset.
Chart patterns and harmonics are examples of known repeating
fractals.

• I mainly use random repeating fractals as loose predictor of future

outcomes on a big time scale, but I personally don’t use them as ac-
tionable signals alone.

. . .

Chart Patterns
All chart patterns consist of:

Volume
If volume proXle does not match pattern, it does not mean pattern does
not exist, it merely suggests that the probability of the pattern playing
out as expected is signiXcantly lower. ConXdence and position sizing
should be adjusted to accommodate. A matching volume proCle for
the pattern considerably increases conCdence and probability of the
pattern playing out as expected.

Measured Moves

Each pattern has an expected measured move, which I will highlight be-
low. Generally, all measured moves are simply the size of the pattern. I
also use the 1.618 Xbonacci extension as a resistance target for the pat-
terns. Although the patterns have expected moves, they should not be
considered 100% slam dunk trades. Use position sizes accordingly.

Trade Entry

All patterns can be drawn and predicted as soon as information allows,

but trade entry should never occur until after the pattern has completed.
There is also typically a volume conXrmation with the completion of
each pattern.

Strict Rules

You do not often see reversal patterns as continuation patterns in a

trend, ie, you do not often see head and shoulders pattern at the bottom
of a bear trend. When you do however, that pattern should be seen as a
strong continuation signal.
Cheat Sheet
Here are a few examples
Bullish Continuation

• Cup & Handle

“U” shaped price structure with and sharp pullback and break of horizon-
tal resistance. The pattern remains valid so long as the handle does not
break 50% of the entire cup.

• BTC Chart

• Ascending Triangle

Bearish Continuation

• Flags/Pennants — opposite of bullish eags/pennants

• Descending Triangle — opposite of Ascending Triangle

• Girame — Established by Hernz — Long neck followed by break of

rounded double bottom
Bullish Reversal

Inverted Head & Shoulders

• Occurs after an established uptrend

• Descending volume proXle

• Measured move = distance from neckline to head or 1.618 Xb

Double Bottom

• W for Win

• Two sharp bottoms

• Occurs after a pullback from an uptrend

• Descending volume proXle

• Measured move = distance from neckline to head or 1.618 Xb

Adam & Eve

• A ‘V’ and a ‘U’ shaped bottom

• Occurs after a pullback from an uptrend

• Descending volume proXle

• Measured move = distance from neckline to head or 1.618 Xb

Bearish Reversal

Head & Shoulders — opposite of inverted head & shoulders

• Occurs after an established downtrend

• Descending volume proXle

• Measured move = distance from neckline to head or 1.618 Xb

Double Top

• M for Murder — Opposite of W

• Inverted Adam & Eve — Opposite of Adam & Eve

. . .
Oscillators
I never use oscillators alone when deciding on the actionability of a
trade. I mainly use them for Xnding divergences

• Mean Average Convergence divergence (MACD) = trend following

momentum oscillator

• Relative Strength Index (RSI) = measures momentum in price

• Stochastic RSI (Stoch) = faster than RSI

Divergences — Cheat Sheet

Should be used as evidence of reversal for coneuence but not traded on

solely. Divs can build gradually until broken.

• Bullish = lower lows in price on higher oscillator = weakening

bearish momentum

• Bearish = higher highs in price on lower oscillator = weakening

bullish momentum

• Hidden bullish = higher low in price on lower oscillator = in-

creased bearish momentum did not drop price

• Hidden bearish = higher high in price on higher oscillator = in-

creased bullish momentum did not drop price

. . .

Tips
• Fundamentals tell you what to buy. Technicals tell you when to buy.

• Loser average Losers. Stick to your system of entry and stops

religiously.

• Use stops and stick to them.

• When euphoria kicks in, that’s usually a local top.

• Much of the trading-related news & social media troll boxes are
noise. Ignore them.

• Trades should end in 3 ways: Big Win, Small Win, Small Loss

• Repeat after me. “The trend is my friend”.

• Don’t scalp the counter-trend.

• Keep a trading journal. Determine eaws. Eliminate them.

• If you open a trade based on a high timeframe signal, don’t self-sab-

otage and close that trade based on a much lower timeframe signal.

• Good sleep, proper diet & exercise are just as important for trading
as they are for most things in life.

• If there is blood in the streets…clean up the street.

• Don’t get chopped up trying to trade/scalp sideways price.

• Expect consolidation after large price movements, not continued

volatility.

• All indicators are using the left side of the chart to try and predict
the right side of the chart.

• Chart the exchange with the most volume.

• Most traders lose a signiXcant number of trades when starting.

Those who are most successful are persistent.

• Trade your own account. Don’t let others trade it for you.

• Agree with the ideas, not the people with supply them.

• Don’t be married to any one coin, position, or idea. Constantly

reevaluate for eaws.

• If you’re winning a lot, someone else is losing more.

• A big loss will ALWAYS be more emotional than a big win.

• You need a large sample size to determine if you are a winner or a

loser. Variance happens to everyone.

• No one strategy is a holy grail. Use multiple signals and Xnd coneu-
ence prior to entry/exit. Use what you like and toss the right.
• Trading tools can get sharper or duller. Don’t be afraid to brush up
on concepts you’ve already mastered.

• Look at everything as a number and not money. Always look to be

increasing that number.

• Start trading using high leverage and small position sizes. This tests
the quality of your entries.

• Fear, uncertainty, and doubt (FUD) are great drivers for panic buy-
ing and selling.

• After a big winning or losing trade. Step away and regather your
emotions.

• If you’re getting emotional in a losing trade, then your position size

is too high.

• Stop trying to rationalize everything. Trade the chart that is in front

of you.

• There will always be early bears and early bulls. Being right is more
important than being early.

• Zoom out Xrst. Zoom in later.

• On the way up, coins look cheap. On the way down, they look ex-
pensive. Don’t let the market play with your mind. Stick to your
trading plan.

. . .

Additional Reading List

• Investopedia

• EasyPips

• Bulkowski

• StockCharts

. . .
Common Acronyms
OB = orderbook

TF = timeframe

SL = stop loss

BE = break even

HS/H&S/H+S = head and shoulders

iHS = inverted head and shoulders

A&E = adam and eve

TL = trendline

Fib = Xbonacci retracement level

FUD = fear, uncertainty, doubt

FOMO = fear of missing out

. . .

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