The standard way people use Ichimoku in the West for a bullish set-up is to wait for a Kumo twist when Senkou Span A crosses Senkou Span B. This gives you an idea of what future price sentiment 26 periods forward will be like. But the Kumo has another key feature. It's an excellent indicator to find support and resistance zones both past and future. There are some people who initiate a trade on a Kumo bounce. Look on the chart and you will see many examples where this actually works but without context, it means nothing in the grand scheme of things. Trading is gambling when you hit and hope for the best. But that scenario changes when you apply logic to the market and follow the footprint of the smart money. In many cases, you might have a Spring which leads to an SOS and an LPS. In some cases, the LPS will playout on the Kumo bounce. Remember context is always important.
Look on the left-hand side of the chart and notice the flat Kumo zones called Kumo shadows. These are areas where price often finds support or resistance. When the price goes up you will often find these Kumo Shadows have the same values as Fib retracements. Generally, most Ichimoku traders view price in the Kumo as turbulence or trendless and they stay out of the market. The Japanese are conservative traders very different from their western counterparts.
Once you have a Kumo twist, then we look for a golden cross similar to how traders look at moving averages. In this case for our bullish set-up, we require the Tenkan Sen to cross above the Kijun Sen. Ichimoku traders in the West often talk about a weak, neutral and strong golden cross, but this in my humble opinion is BS. There are ample enough examples to show a weak cross can lead to a massive bullish trend.
Next, our focus should be on the Chikou Span. Many Ichimoku traders love this indicator and for good reason. Its main feature is momentum and it gives you a warning when the price will be choppy or trending. When price pops outside of the Kumo but the Chikou Span is trapped inside a congested zone full of previous candlesticks then it giving you a warning we have a strong resistance zone and this is a fake breakout trade. The Chikou Span needs to be away from candlesticks. When the Chikou Span goes back into the candlestick from a bullish trend this can give you a heads up that price is either re-accumulating or is in the process of distribution.
The above example is a basic brief way of how you can trade Ichimoku. There are many other features of the five components but its too long to explain. This is how Western traders look at Ichimoku. Do you think Goichi Hosoda spent more than 30 years on these components? Before his death, he once famously said in the 80s of the 10,000 traders who use Ichimoku only ten know how to use it properly. One of them was Hidenobu Sasaki who was Japan's best-ranked trader for 9 consecutive years before he passed away. Yoshino Yutaka his student is currently the 2nd best analysis in the country. So that begs the question there must be more to Ichimoku than just the five components. Well, there is and its called price, time, wave theory.
I will give a brief description. Goichi Hosoda had a wave system similar to Elliot Wave, but it's more primitive in comparison to EW, but still has its uses. He introduced the I, V, N, Y and P wave. The S wave was later introduced by Hidenobu Sasaki and some call it wave 4. These are described in Nicole Elliot's book, but she does a poor job in my opinion but at least you get a basic understanding. I recommend you in checking it out. Irrespective of her misconception of Ichimoku she is a brilliant trader. Next, we have price observation theory the equivalent to Fibonacci in EW. But its not the exact same and price does seem to hit these levels. You have NT, N, V, E, 2E, 3E, 4E values. Each of these has a formula for you to calculate price targets. Then we have time theory, the hardest of the 3 but according to Goichi Hosada the most important. You will notice most of his cycle numbers coincide with some of the best cycle analysts on business, economy, and markets. To my mind Dewey, Elliot and Kondratieff's work link with Hosada's time cycle theory. The basic values are 9, 17, 26, 33 and 42. Then you have 51, 65, 76, 81, 97, 101, 129 etc. He has a unique way of counting it and deriving these cycles. What makes him different is the introduction of equal cycles. If for example, the change date doesn't occur on his notation then he uses that number to find the next cycle. What I recommend is using Wyckoff with Ichimoku even with the basic level and don't disregard EW.
