Buying Kumo Bottom

The cloud (or the kumo as the original name is) is the most visible element out of the five elements that compose the Ichimoku: Tenkan, Kinjun, Senkou A, Senkou B, the cloud and the Chinkou.

One of the mostly used strategies empoyed by traders when looking at the Ichimoku is to buy the cloud’s bottom when price is reaching it. However, while I agree with the overall statement, I have some amendments to make:

  • whenever trying to buy the bottom of the cloud make sure the cloud is green, indicating still a bullish environment;
  • one shoud look for buying the bottom of the cloud not when the actual price is hitting that area, but when the Chinkou (the laging span) is doing that. The reasoning for such a thing is that usually when the actual price is testing the bottom of the cloud little support is to be found as the cloud being so visible makes such a possible support area to be too obvious. For that reason, often price just breaks it. However, if looking at the Chinkou, the one element everyone is ignoring and trying to buy the bottom of the cloud when the Chinkou is testing it, then chances of such a strategy to be profitable are increasing consistently. In such a case, looking for possible places for engaging in buying calls when trading binary options should be appropriate.

The recording that comes with this sub chapter deals with explaining the setups and what to look for when Chinkou is approaching such an area.