In our introduction to the IML Web Analyzer (WA), you learned about the 3 tiers of service of the WA. On this post we are going to talk about the third tier of service, Minimal Analysis. Specifically, we are going to talk about the ECC-11 Strategy. This strategy uses the Ichimoku Cloud as indicators, but there are a few rules and settings you need to follow.
Want to see more examples?
We’ve got a great post that goes over two trade ideas with the Web Analyzer. Take a look!
First, let’s go over the settings of the Ichimoku Cloud for the ECC-11 strategy. These settings are direct from the creator of the strategy, Dr. Kathy Kirkland. The only change I’ve made from her settings is the Lagging Span color. I found that yellow was easier for me to personally see on the charts.
Let’s take a look at the ECC-11 checklist. This will help you decide if you are going to take the trade or not.
- Check the entry price and time frame on the web analyzer.
- Check to see if the Red line has crossed above or below the Blue line.
- Red ABOVE Blue = Buy
- Red BELOW Blue = Sell
- If it has crossed on the 15m time frame, get in with a 10 pip take profit.
- If you are analyzing on the 5m chart only look for 3-5 pips.
- You can apply this strategy anytime the Red line crosses the Blue line.
- It does not have to be above or below the cloud!
- If the red/blue cross is within the cloud this could indicate a pullback. It could also mean congestion or consolidation. Do not take this trade!
We’re not going to get into a detailed explanation of the Ichimoku Cloud, but a few things need to be defined here. While there are five components to the Ichimoku Cloud, we are looking at three of them. The Conversion Line (or the Tenkan Line), the Base Line (or the Kijun Line) and the Lagging Span.
Thus at times you might hear of red line/blue line cross as the “TK Cross.” This is when the Tenkan Line (Conversion) crosses the Kijun Line (Base.) If someone refers to it as such, you now know what they are talking about!
5 Minute Example
Let’s take a look at a real idea that was sent to the Web Analyzer so you can see how the checklist was applied to the call with this strategy.
The Web Analyzer sent out an idea indicating a possible Sell on CAD/JPY on the 5 minute chart. Here is what the chart looked like right after the call. As you look at the chart notice 2 things.
1) The Blue line is over the Red line.
2) The TK Cross happens outside of the cloud.
One other item that we sometimes look at is the RSI. In this instance it’s headed down, which for us served as another confirmation this was a good trade to take.
Click Image to Enlarge
Now let’s take a look at the chart about 25 minutes later.
Click Image to Enlarge
As you can see the price did indeed go down. Reminder that the checklist says for a 5m chart, you should shoot for 3-5 pips of profit. We’ll just say that if you left this open with a trailing stop loss, (ie., stop profit) then you would have been quite happy.
Get the full details of this markup on TradingView.
More To Come
As we add more information about this strategy to the Forex Secrets Unleashed site, we’ll be updating this page.
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