Japanese Trading Methods

This book is an introduction to four of the main Japanese trading methods.  Ichimoku Kinko Hyo, Heikin Ashi candlesticks, Renko charts, and Kagi charts.

These four methods of technical analysis of the financial markets have in common the discipline and patience that they bring to our trading.

In general, the Japanese culture considers discipline and patience a virtue, which inevitably ended up being transferred to their trading systems.

All four systems are particularly well suited to trend following. They will allow us to stay much longer within the trend. Instead, they may present some problems in lateral markets.

This book is structured into five parts.
 Introduction (or review) to the formation of the Japanese candlesticks with their main formations. The Ichimoku Kinko Hyo system Heikin Ashi candlesticks Renko charts Kagi charts
The book focuses on Japanese methods of technical analysis "beyond" traditional Japanese candlesticks, which are already a standard in technical analysis.  However, I have felt it necessary to present an introductory chapter on these candlesticks and their main formations. This chapter may come in handy for those readers who need to acquire some notions about Japanese candlesticks or those who may be interested in a review to dust off concepts.

The second part of the book is devoted to Ichimoku Kinko Hyo. It is a straightforward system to understand and, above all, to trade. It presents very clear strategies both in the entries and the exits of the trades, avoiding subjective judgments. Something essential in trading. Not only that, but as we will see, its name does it justice. The time we spend analyzing each chart is dramatically reduced. At a glance, we will be able to decide if we have a possible trade or if we should look for another one. Besides, being a system that works best over long timeframes (four hours or daily) makes it a very suitable system for non-professional traders to find ways to make their daily activities compatible with trading in financial markets.

The book will describe the main strategies used in the Ichimoku system. All of them, with a checklist of the main points that the trade must meet to achieve a high probability of success.

The third part of the book is devoted to Heikin Ashi candlesticks. This type of candlestick combines very well with the Ichimoku System. They are more straightforward and intuitive to use than traditional Japanese candlesticks.  Furthermore, they introduce a much smaller number of formations, significantly simplifying their theory. At the same time, they feature smoother charts that are well suited to trend following.

The fourth and fifth parts of the book are devoted to Renko and Kagi charts.

Unfortunately, these types of charts are relatively unknown, and there is very little information in any western language, especially with Kagi charts. It is a shame because, in my opinion, both types of charts naturally bring discipline and patience to our trading. For those traders who are a little impatient, who close their positions prematurely and do not let trends run, they can mean the transition from losses to profits. In both cases, the time dimension is irrelevant. They focus on nothing but price action and will allow us to see trends and support and resistance levels with amazing ease.

These Japanese trading methods of technical analysis can make a big difference in your trading, especially if you are impatient and tend to close your trades too early.  They can also be applied to any financial market, be it the stock market, Forex, futures, options, cryptocurrencies, or commodities.