Do Ichimoku Cloud Charts Work and Do They Work Better in Japan?

International Federation of Technical Analysts Journal, 2016 Edition, Forthcoming

7 Pages Posted: 9 Jul 2015 Last revised: 6 Nov 2015

See all articles by Lim Kai Jie Shawn

Lim Kai Jie Shawn

University College London - Department of Economics

Selin Yanyali

University College London - Department of Economics

Joseph Savidge

University College London - Department of Economics

Date Written: July 9, 2015

Abstract

This article explores the profitability of signals generated using Ichimoku Cloud Charts on single stocks in Japan and the USA. We construct a conservative and aggressive long-only and short-only strategy over a period from 2005-2014 and examine the profitability of the various strategies. Based on the simulation, we evaluate the ability of Ichimoku Cloud charts to generate profitable trading signals in these 2 markets. In addition, we propose that the Cloud chart exhibits characteristics typical of a momentum and breakout strategy with returns that are positively skewed and with a small left tail due to the natural stop loss built into such a strategy.

Suggested Citation

Kai Jie Shawn, Lim and Yanyali, Selin and Savidge, Joseph, Do Ichimoku Cloud Charts Work and Do They Work Better in Japan? (July 9, 2015). International Federation of Technical Analysts Journal, 2016 Edition, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2628581

Lim Kai Jie Shawn (Contact Author)

University College London - Department of Economics ( email )

Gower Street
London WC1E 6BT, WC1E 6BT
United Kingdom

Selin Yanyali

University College London - Department of Economics ( email )

Gower Street
London WC1E 6BT, WC1E 6BT
United Kingdom

Joseph Savidge

University College London - Department of Economics ( email )

Gower Street
London WC1E 6BT, WC1E 6BT
United Kingdom

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