[Music] welcome to trade pro in this video i'm going to show you a complete ichimoku cloud trading strategy with simple rules to follow for your entry stop loss and your profit target placement if the ichimoku cloud has never made sense to you from other things that you've seen online already this is why it's because there's a cloud that extends out in front of the price data and a lagging span that sits behind the price data and when you show the data like this it's really hard to see where those things land the only way to really see it easily is by using the bar replay feature or live price data so i'm going to use the bar replay feature to replay the price data so it actually makes sense when i'm going through the examples before i go over all the rules for entering a trade i'm just going to quickly go over the different components of the ichimoku so let's go into the settings here and go through each one just so you know what i'm talking about when i'm explaining the strategy itself so conversion line in blue here we have the baseline in yellow the lagging span in the purple and which sticks 26 periods behind the current candle then lead one and lead to outline the cloud itself then we have the plots background which is just the background of the cloud and the cloud sets 26 periods in front of the current candle okay so just to show you the different components of it so it all makes sense when i'm explaining the rules for the strategy the first rule is for a short position you need to see price closed below the ichimoku cloud for a long trade price must close above the cloud the second rule for a short position is that the cloud must be read 26 periods in front of the current candle so you need to look at the most current color of the cloud at the time that you're going to be looking for an entry notice how on this long example the cloud has not yet shifted green so all the entry criteria would not be present for this long trade the next thing you need to make sure of is that the conversion line has crossed below the baseline so the blue line crossed below the yellow line this is actually normally the first thing that occurs before any of the other steps now you see that this first time that price breaks above the cloud the conversion line is still not crossed above the baseline so you could not take that entry even if all other criteria was met the next time that the price does break above the cloud you see the conversion line has now crossed above the baseline so this could potentially be valid given all the other factors are present the last rule that you need to follow is with the lagging span line now for a short trade you need to make sure that the lagging span has also crossed below the cloud in this example all the criteria is met except for the lagging span is not below the cloud so let's put this on bar replay feature and we're gonna wait until all the criteria is met and that is when we will enter the trade so it looks like it's getting closer now so it actually did cross below the cloud so let's see when that happened on this candle right here and at that same time we have a red cloud we have the conversion line below the baseline and all of our criteria is met price is below the cloud we have the lagging span below the cloud we have a red cloud to the right side the most recent cloud and we have conversion line below the baseline so this would be our entry candle for a short position what you can do is set your stop loss just above the cloud and target two times your risk now let's play it out and that one was a good one now let's go over to a long example and go over the rules again right so let's go over all the rules before a long position and put it on bar replay feature and make sure everything lines up for this trade so the first thing we're looking for is a close above the cloud so let's wait for a close above the cloud so we've got to close above the cloud here the next thing we need to make sure of is that we have the cloud actually signaling a green color so we want to make sure that on the candle that closes above that we already have a green cloud so yes we do already have a green cloud the next thing we want to see is is the conversion line above the baseline yes it is on this candle close the conversion line is crossed above the baseline but one thing's not present we don't have the lagging span above the cloud so we need to wait okay so when did all the criteria happen now let's go back a couple candles and see which one it was not here let's go one more candle so this was the candle closed that did it so this would be our entry for a long position so enter stop loss targeting two times your risk and let's play it out here fast and the profit target gets hit stop still intact all right so let's find another example now and go over it alright so here is another short example let's play it out on the bar replay and go over the rules so we had a close below and we do not see a red cloud over here we do not see the lagging span the only thing that we have is the close and the conversion line crossed below the baseline so we're waiting no entry we got more closes below we got a red cloud now but the conversion line is now actually over the baseline and lagging span is not agreeing so we're just waiting okay so we got actually a close now where the conversion line is below the baseline and we have a red cloud still and it looks like the lagging span has just crossed down on this candle so this is our entry candle right here so all the criteria has been met let's enter a short position stop just above that cloud and targeting two times the risk i'm gonna play it out fast all right so that is the trade for that setup now let's go on to another long example alright so let's start the bar replay feature here and wait for a candle to close above the cloud all right so we've got a candle close above let's see if the can or the cloud had flipped to green yet looks like it had just flipped to green and we have conversion line above the baseline and it looks like our lagging span has just crossed above the cloud itself so all the criteria is met on this candle closing here so this is our long candle let's take a long position on this candle close stop going just below there and then targeting two times a risk and let's let it play out speed it up here and it looks like it was a good one let's move on to another short alright so in this short example i want to go over a way that you can save yourself from some losses by using the lagging span to get yourself out of a trade when it starts reversing on you so i'll show you what i mean let's just play it out here so we gotta close below no entry yet legging spans not below everything else is checked now let's just wait for that lagging span still not there okay so lagging span let's go back a couple candles looks like it was on that candle there so that's where we get the entry signal everything is present and with this example the stop is extremely far away so you can also modify the way that you do this stop but you're going to have an extremely far away profit target in this instance so this is where i'm going to show you a method that you can use to save yourself from taking losses that you don't need to take so let's play it out here and what i'm going to talk about is the lagging span in relation to the price so if the lagging span ever goes over the price while you're in a short position you can exit and save yourself from taking a loss so at this point you can start getting worried because now the lagging span has come into contact with the price and actually now come fully above it this is where you want to start getting worried because you know that now price has likely started to reverse so you can just take your position and close at this point instead of letting it go to your stop loss it's better to save yourself even if price ends up going in your favor afterwards it's still better to save yourself from the losses that will occur as i believe this one does end up being a loss yeah so if you get that lagging span and it flips above the price that's where you want to start thinking about getting out of the trade and saving yourself from taking a loss another thing you can do if you don't want to cap your profit target at two times a risk is use the baseline to follow the trend and stay in it longer until there's a close back above or across of the conversion line back above that baseline you can also do what i talked about with the lagging span and if it comes above price exit the trade that way but it's up to you those are just some ideas that you can implement all right so here's another long example let's start the bar replay so we're just waiting for a close above so we got that closed but none of the criteria is really present other than the conversion line crossed above the baseline but we don't have the green cloud we don't have the lagging span above the cloud so we're just waiting all right so now we have quite a few pieces of criteria being present so on this candle right here we have the green cloud we have the lagging span above and let's see about that conversion line so it doesn't look like let me make these bring these to front yeah it doesn't look like it's actually above so let's let me just pull this back one candle here and just see what it's looking like yeah so conversion line not looking quite there yet on that candle so we're actually still just gonna wait okay so it actually show just right after looks like on this candle right here is our long signal so you actually got a better long entry so let's take that long stop below the cloud targeting two times the risk and let's speed it up here okay so that's a good one let's move on to the next one all right so the last example here will be a short and let's start out the bar replay so we got to close under the cloud now but there's no red cloud we don't have the lagging span anywhere near and so we're just waiting so it looks like we got a cross on that cloud now but we're still waiting for the lag and span over there and it was a good thing that we had to wait for the lagging span because big pullback looks like we just are about to get a and span cross down so just right here on looks like looks like it was actually this candle right here let me just pull it back yeah okay so this was the candle that gave it to us so we're going to enter short on that candle everything else is present looks like the conversion line has just crossed black below the baseline as well red cloud yeah so we're good stop loss is close on this one so we'll see if it is safe again you can find another way to better use the stop loss or better do the stop loss with a atr method or some other method and that one is good so that's the final example i hope it all makes sense i mean i'll list the rules out simply you're waiting for that close over the cloud or under the cloud you're waiting for that cloud to shift the most recent cloud needs to shift in the same color of the direction you're taking the trade you need to make sure that the conversion line has crossed above or below the baseline and the direction of the trend you're taking and you need to wait for the lagging span to cross above or below the cloud depending on the direction of that trade that you're taking okay so really simple set of rules and it's a common set of rules it's not something i invented it's a simple way of trading with ichimoku and i just thought i'd do it on the bar replay feature and show a bunch of examples if it's never really made sense to you in the past hopefully it did now if you like this video or appreciate it make sure to like the video and subscribe to the channel comment down below for the youtube algorithm thank you very much for watching appreciate you guys