Ichimoku Cloud Pux CCI Forex Trading Strategy

Ichimoku Cloud Pux CCI Forex Trading Strategy 1

High quality, high probability trades – this is what most traders would want in a trading strategy. Sure, some would want trading strategies that would get as many trades as possible and hope they get those huge yielding trades ones in a while. But for many traders, it is much preferable to have consistency rather than a yield curve that is quite erratic.

Technical trading could be one of the ways to trade and gain consistently from the forex markets. This is because technical trading is often rules-based. As such, traders could maintain the same strategy day in and day out, week after week, and be consistent with what they are trading. This consistency allows the rule of large numbers play in their favor.

The key to being successful in technical trading is in making use of the right tools, which are the technical indicators. Technical indicators are not created equal. Some are just better than the others. Some produce good results while others don’t. The Ichimoku Cloud Pux CCI Forex Trading Strategy makes use of high probability technical indicators which have been proven to work over time.

Ichimoku Kinko Hyo or Ichimoku Cloud

The Ichimoku Cloud indicator is one of the indicators that have seen huge success even as a standalone indicator. In fact, when back tested, the Ichimoku Cloud indicator shows to be one of the best performing standalone indicator among many indicators.

The Ichimoku Cloud indicator is a trend indicator which is plotted on the price chart. It makes use of multiple lines which are based on medians and moving averages, which are modified. These median and moving average lines represent a certain trend.

The Tenkan-sen or Conversion Line is a short-term trend indicator, which is based on the median of a 9-period high and low. The Kijun-sen or Base Line is a mid-term trend indicator calculated as the median for the past 26 periods. These two lines are often used as a trend reversal signal based on its crossing over of each other.

The Senkou Span A (Leading Span A) is an average of the Tenkan-sen (Conversion Line) and the Kijun-sen (Base Line). This line represents a slower mid-term trend. The Senkou Span B (Leading Span B) is a median line of the last 52 periods. These two lines form the Kumo (Cloud). The Kumo represents the long-term trend, which is based on how the Senkou Spa A and B are stacked. Traders often use this as a trade direction filter. However, the crossing over of the two lines also indicate a reversal of the long-term trend.

The Chikou span or Lagging Span is basically the price action shifted to the left. It is a line plotted based on the close of each candle and is shifted 26 periods prior to the current candle. This is often used to determine if the market is choppy or not. Traders consider the market to be choppy if the Chikou Span is touching price action, since strong trending markets would often cause the Chikou Span to lag far behind price action.


The Pux CCI is a modified version of the popular Commodity Channel Index (CCI). It is a momentum indicator which is plotted as an oscillator. It draws histograms and lines to indicate trend direction and shadow price action movements.

The gold line is a fast-moving line which attempts shadow price action movement and is representative of a very short-term trend. This line does quite well in moving with price action, however it often creates false signals if used as a standalone indicator. It is best to use this indicator only if it is in confluence with the histograms of this indicator, which is its mid- to long-term trend indicator.

The histograms represent the mid- to long-term indicator. It is plotted as an unbounded oscillator which moves around its midline, zero. Positive histograms indicate a bullish market bias while negative histograms indicate a bearish market bias. However, not all positive or negative bars are indicative of a strong trend. Non-trending markets have histograms painted blue, while bullish trending markets have green histograms, and bearish trending markets have red histograms.

Traders could use the crossing over of the histograms from positive to negative or vice versa as a signal. Conservative traders however prefer to use the changing of colors to green or red as a higher probability entry signal.

Trading Strategy

This trading strategy is based on two high probability trend following and momentum indicators, which are the Ichimoku Kinko Hyo indicator and the Pux CCI. Trades signals are generated when there are confluences based on the two indicators.

On the Ichimoku Cloud indicator, the trade direction of the Kumo crossover and the Tenkan-sen and Kijun-sen crossover should be in confluence.

The Pux CCI on the other hand should also be in confluence with the Ichimoku Cloud indicator. However, trade signals are confirmed only when the histogram bars are either green or red, which indicates either a bullish or a bearish trending market.


  • Ichimoku

Timeframe: preferably 1-hour, 4-hour and daily charts

Currency Pairs: preferably major and minor pairs

Trading Session: Tokyo, London and New York sessions

Buy Trade Setup


  • The Pux CCI indicator should be printing green histograms indicating a bullish trend
  • The Kumo should have the Leading Span A above the Leading Span B indicating a bullish long-term trend
  • The Tenkan-sen should cross above the Kijun-sen indicating a bullish trend
  • Enter a buy trade on the confluence of the above conditions

Stop Loss

  • Set the stop loss on support level below the entry


  • Close the trade as soon as price closes below the Kijun-sen

Ichimoku Cloud Pux CCI Forex Trading Strategy 1

Ichimoku Cloud Pux CCI Forex Trading Strategy 2

Sell Trade Setup


  • The Pux CCI indicator should be printing red histograms indicating a bearish trend
  • The Kumo should have the Leading Span A below the Leading Span B indicating a bearish long-term trend
  • The Tenkan-sen should cross below the Kijun-sen indicating a bearish trend
  • Enter a sell trade on the confluence of the above conditions

Stop Loss

  • Set the stop loss on resistance level above the entry


  • Close the trade as soon as price closes above the Kijun-sen

Ichimoku Cloud Pux CCI Forex Trading Strategy 3

Ichimoku Cloud Pux CCI Forex Trading Strategy 4


The Ichimoku Cloud Pux CCI Forex Trading Strategy is a strategy based on the confluence of two high probability trend indicators, the Ichimoku Kinko Hyo and the Pux CCI.

These trade setups provide entry signals that align the short-term, mid-term and long-term trends, allowing traders to enter on a high probability trade. There will be times when the trade entry is a bit later, however this is the trade off in order for us to have a confirmed trend direction across the horizon. This in turn results in higher probability trades. The returns in relation to the risk per trade may not be as high, but we get win more often than other trading strategies.

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