The Kumo Twist is one of the lesser known trading strategies within the Ichimoku Kinko Hyo system.
This is mostly due to the fact that the Kumo Twist tends to be more commonly used as an additional confirmation with other trading strategies rather than being used as a standalone trading strategy in its own right.
However, it is nonetheless a solid trend trading strategy and can definitely be used on its own.
Given that the Kumo Twist strategy, like the kumo breakout trading strategy, utilize the kumo for signal generation, it is best employed on the longer time frames of the Daily chart and above.
The Kumo Twist signal is given when the senkou span A line crosses over the senkou span B line of the kumo. If the senkou span A crosses the senkou span B from the bottom up, then it is a bullish signal.
Nevertheless, like all trading strategies within the Ichimoku Kinko Hyo system, the Kumo Twist signal needs to be evaluated against the larger Ichimoku 'picture' before committing to any trade.
The thing to keep in mind with the Kumo Twist strategy is that the 'cross' signal will take place 26 periods ahead of the price action as the kumo is time-shifted 26 periods into the future.
This relationship is obvious when one looks at the current price on a live chart, but less so when looking at historical price action.
In addition, while all Ichimoku strategies should be exercised with the larger Ichimoku picture in mind, this is particularly important with the Kumo Twist.
Thus, determining the overall trend on higher time frames first and then taking only senkou span signals that align with that trend on the lower timeframes is the best implementation of the senkou span strategy.
Contributor: iSaham.
Disclaimer: Use of the information herein is at one's own risk. The information provided here is not, and must not be construed to be, or form part of, any recommendation, offer or invitation to buy or sell any securities. Some of the information here is exclusively for iSaham clients only.
# | Symbol | Last Price | Tenkan-sen | Kijun-sen | Senkou Span A | Senkou Span B | Recent Twist | iSaham Score |
---|