cloud charts - cmt association background • founded updata in 1991 in the uk • developed by...

David Linton MFTAChief Executive Officer, Updata

david@updataTA.com

Cloud ChartsIdentifying trend changes in global markets

MTA – Annual Symposium 2011

Updata Inc.27th Floor, 1325 Avenue of the AmericasNew York, NY 10019

• Construction – Understanding• Using with other techniques• Multiple Time Frames• What the ‘clouds’ tell us now

Cloud Charts

My Background

• Founded Updata in 1991 in the UK• Developed by experienced TAs• Cloud Charts Book published 2010• Teach Ichimoku Module at UK STA• IFTA Paper on Optimization of Stoplosses

Market Professionals in over 40 countries rely on Updata Professional

Against: Bloomberg, CQG, eSignal, Metastock, Tradestation, Trading Technologies

ConstructionKey Elements

Cloud Chart History1750s – Munehisa Homma - Candlesticks1880s – Charles Dow – Dow theory1930s – Goichi Hosoda – Ichimoku development1940s – Edwards and Magee 1960s – Hosoda publishes book on Ichimoku1980s – IFTA – East meets West (SoCal 1984)1990s – Hidenobu Sasaki publishes book2000s – IFTA Conference Madrid – Rick Bensignor

Ichimoku Kinko Hyo - Definitions• translates from Japanese into English as "one look.“• a glance at equilibrium prices• analyses the mid-points of historical highs and lows• are trend following indicators• can be used in a way similar to moving averages• allows for wider support and resistance zones• decreases the risk of trading false breakouts• conveys a great deal of information

on trend existence, direction, support and resistance

Cloud elements - Japanese

Chart 1-2

Cloud elements - English

Chart 8-1

Cloud Chart Construction1. Turning Line (conversion line) – 9 bar midpoint

2. Standard Line (base line) – 26 bar midpoint

3. Cloud Span A (Span 1) – midpoints of lines 1&2, shifted forward 26 bars

4. Cloud Span B (Span 2) – 52 bar midpoint, shifted forward 26 bars

5. Lagging Line (lagging span) – price shifted back 26 bars

9 – 26 - 52

Line Construction

Chart 8-3

Lines 1&2 v Moving Averages

Chart 8-6

Cloud Span A

Chart 8-7

Cloud Span B

Chart 8-8

Cloud Spans v Moving Averages

Chart 8-9

Lagging Line

Chart 8-12

Lagging Line and Cloud Span B

Chart 8-13

Interpreting Cloud Charts

Chart 9-1

Price interacting with Cloud

Chart 9-3

Bullish and Bearish Zones

Chart 9-4

Trend change

Chart 9-5

Cloud Thickness

Chart 9-8

Lagging Line and the Cloud

Chart 9-11

Lagging Line and Whipsaws

Chart 9-12

Later but Safer

Chart 9-14

Dealing with temporary breaches

Chart 9-15

Turning and Standard Lines

Chart 9-20

Clouds are a Roadmap

Chart 9-22

Cloud Charts in Sideways markets

Chart 9-23

Why do Cloud Charts work?

Figure 9-1

Using Clouds with other

Techniques

Candles and Clouds

Chart 6-9 *

With Oscillators – Sideways Markets

With Oscillators – Trending Markets

P&F Trend changes often agree

P&F Price Targets often concur

Price and Time projection

Chart 11-7

Clouds and Fibonacci Retracements

Cloud Chart of Gold P&F

Use small intra-day box sizes

Clouds on Seasonality

Clouds with CandleVolume

Clouds of Relative Strength Charts

Can you Optimise 9, 26 and 52?

Chart 13-2

Extending the Cloud

Chart 13-5

Cloud Width

Chart 13-8

Distance from Lagging Line

Chart 13-17

Cloud (LL) Bullish Percent

Chart 15-7

Cloud BPC price and lagging line

Chart 15-8

Scanning for cloud crosses

Appendix 1

Multiple Time Frames

Uptrend or Downtrend?

Uptrend or Downtrend?

Chart 10-3

Multiple Time Frame Analysis

Figure 10-2

What’s your Time Horizon?

Figure 10-3

Changing time frames

Chart 11-8

Intra-day charts

Chart 11-9

S&P 500 - Medium & Long Term

And Short Term

Have you Back-tested it?

Chart 14-2

Using a Signal Delay

Chart 14-5 *

Optimising for the shorter term

Chart 14-9

Taking the longer term into account

Chart 14-10

Signal delay and weekly cloud filter

Chart 14-11

Backtest Results Cloud CrossesMarch 2010

S&P 500 stocks – 5 years index down 7.5%

Using a signal delay 0-5 days33% profit overall – 60% of stocks profitable

Taking the weekly trend into account + signal delay79% profit overall – 86% of stocks profitable

So what do the Clouds

tell us now?

US Stockmarket Ultra Long Term

78 Quarters = 19½ years

S&P 500 Index – Very Long Term

S&P 500 Index – Long Term

S&P 500 - Medium & Long Term

S&P 500 Index - Short Term

S&P500 Index – Ultra Short Term

Use with P&F Price Targets

Nasdaq – Long Term

Brazil - Bovespa

BSE – Sensex (India)

Oil – Medium & Long Term

Oil medium term pullback

Oil – Short Term Picture

US Nat Gas

Gold – Long Term

Gold – Medium Term

Gold Short Term

Silver – Short & Medium Term

Copper – Medium Term

US Dollar – Long Term

Eurodollar – Medium Term

US Bond Yield trend ending?

And the 10 Year?

S&P 500 Index – Weekly Crosses

Bullish Crosses - Bottoms Bearish Crosses - Tops

David Linton MFTAChief Executive Officer, Updata

david@updataTA.com

Good Luck!The Clouds should help you be luckier

Updata Inc.27th Floor, 1325 Avenue of the AmericasNew York, NY 10019