In the previous post we learned about: The meaning of line cross. Today we will talk more about crossovers
Usually, when it comes to “signals” in Ichimoku Kinko Hyo, they are written in books or on the websites as below.
1. Buy when the Tenkan sen breaks above the Kijun sen (cross from bottom to top).
2. Buy when the Chiko span breaks out of the candlestick (cross from bottom to top).
3. Buy when the price breaks out of the Kumo (the price breaks through the upper Kumo).
1. Sell when the Tenkan sen breaks below the Kijun sen (cross from top to bottom).
2. Sell when the Chiko span falls below the candlestick (cross from top to bottom).
3. Sell when price breaks below the Kumo (price breaks through the lower resistance band).
Now, they are not wrong but the explanations are too short and therefore, you cannot use these signals correctly. For example, there are three buying signals but you may not know which one becomes trustable under certain market condition.
So to minimize false crossings, we have the concept: Three Gold Cross Signals and Three Dead Cross Signals.
To better understand these two concepts we will continue in the next article.