Discuss your understanding of Kumo, as well as its two lines. (Screenshot required)

ANSWER

The Kumo

This Kumo indicator feature draws the eye's attention right away to a filled region, the Kumo clouds. The Cloud is created by the "Senkou Span A" and "Span B" lines, i.e., the Cloud is in between the area of the "Senkou Span A" and "Span B" lines.
A red cloud indicates a downtrend or a fall in asset price when Senkou Span A is below Senkou Span B.
If Senkou A is higher than Senkou B in trend, a green cloud appears, signifying an upward tendency, or an uptrend in price. Long-term or future price behavior can be predicted using the "Kumo" clouds.

It is recommended to look for purchases if the price is currently above the Cloud and the Cloud is green in color.
We're looking for sales if the price is below the Cloud and the cloud color is red.
It is preferable not to trade during the market phase when the price enters the Cloud, which is known as flat. It's also worth thinking about how to get out of the Cloud and open positions if possibly the price breaks and cross borders upward.
The Kumo cloud's objective is to identify market situations and provide levels of support and resistance. The market is thought to be flat when the price is in the Cloud; in this instance, the Cloud's bounds might be regarded as the price's range. If the price climbs above the Cloud, we prioritize long positions; if it falls below, we anticipate a downturn.

In general, the Kumo indicator assists the trader for one basic purpose: to swiftly examine the chart, evaluate the trend, and locate the price in relation to strong levels in order to continue looking for a pattern to open a buy or sell transaction.

Senkou Span A & Senkou Span B

Senkou Span A is known to be the average of the Kijun and Tenkan Sens, which has been pushed forward by a period of 26 based on default settings. Senkou Span B is known to be the average of the high and low of the required time of 52 candles, which has been pushed ahead by 26 bars. The area between these two lines forms the cloud "Kumo," which is colored in either green or red, depending on which is higher: The cloud takes on one of two colors, depending on whether Span A or Span B is higher. This color indicates the likely direction of price movement in the future.
These two lines can also serve as independent support or resistance levels; however, in the case of KUMO, their primary role is to form a cloud.

What is the relationship between this Cloud and the price movement? And how do you determine resistance and support levels using Kumo? (Screenshot required)

ANSWER

With the kumo cloud development, we can forecast what the future price will be, whether a continuous uptrend, decline, or equilibrium when the market finds some balance in demand and supply, and can even be perceived as sideways.

Another association of price movement is the size of the Cloud, which indicates the momentum of a given trend. If the Cloud looks to be large, it signifies that the price has been moving in one way for a long time, but if the Cloud appears to be small, it merely means that the current trend is weakening.

Furthermore, traders should be cautious when the price trend rises above the Cloud, indicating a bullish move, and when the price trend falls below the Cloud, indicating a bearish move.

There's also a twist in the Cloud, which is a different relationship with the price and visualizes a trend change from a bullish movement to a bearish move or from a bearish movement to a bullish move

There is also a point of equilibrium when there will be no clear trend in the market

How do you use Kumo to calculate resistance and support levels?

Kumo Cloud can also be used to calculate or act as a support and resistance. Senkou Span A, as Senkou Span B will be the lines to act as the supports and resistances based on previous periods.

How?

There will be a time when the price will be in the cloud between the SSA & SSB lines; the market at this situation is believed to be no trend; therefore, the Kumo cloud edges will form support and resistance from which the price could bounce or later breaks through.

How and why is the twist formed? And once we've "seen" the twist, how do we use it in our trading? (Screenshot required)

ANSWER

A twist is formed when senkou span A "SSA" line crosses over the senkou span B "SSB" line. It is a bullish indicator if the senkou span A "SSA" crosses the senkou span B "SSB" from the bottom up, and it is a negative signal if SSA crosses the senkou span B "SSB" from the top position to the bottom.
Naturally, the Kumo Twist signal can be used in trading but must be thoroughly studied before engaging in any trade.
The Kumo Twist approach requires you to keep in mind that the cross signal will occur 26 times ahead of the price movement because of the Kumo default settings: time-shifted 26 periods into the future.

With the Kumo Twist, we should expect a different trend pattern from what was happening before; when a twist occurs, it is a signal of price moving from been bullish to a bearish position or from a bearish position to a bullish movement.
The occurrence when the senkou span A crosses the senkou span B from the bottom up to give a bullish signal, after the twist, it is good to wait for a little and observe the price movement, and if it continues with an upward trend, then it is a good buying position.

What is the Ichimoku trend confirmation strategy with the Cloud (Kumo)? And what are the signals that detect a trend reversal? (Screenshot required)

ANSWER

The color of the Cloud will first let us know either the price is in a bullish trend or a bearish trend which will be one of our points for trend confirmation with the KUMO.

The way the cloud "Kumo" operates to visualize a trend momentum for the bullish and bearish market is when the price is above the Cloud and when the price is below the Cloud. When the price crosses over above the Cloud, this confirms a bullish trend, and if the price falls below the Cloud, this clearly confirms that the market is in a bearish trend.
The movement of the price above the Cloud gives a trader confidence in entering a position in the market. But if the price eventually falls below the Cloud, the trader will have to focus on the exiting position.

Also, the twist often brings about the confirmation of a change in trend, after which a different trading signer is given.

From the above chart, we can see how the price of the asset was on a downtrend which was clearly shown through the cloud's color, and a later twist occurred which was our first signal for trend reversal, the price later entered the cloud, and here the cloud became the support and resistance. Later, we see the price break through the resistance in a continuous uptrend movement, which confirmed the reversal signal after the twist.

Explain the trading strategy using the Cloud and the chikou span together. (Screenshot required)

ANSWER

Lagging span is another name for Chikou Span. Today's closing price, drawn 26 periods behind, is the lagging line.

Trading strategies that combine the Cloud and the chikou span will be based on the following considerations:

• Is the price movement above, below, or within the Cloud? The relationship of the price in terms of distance to the Cloud will be noted here.

• What is the Chikou Span distanced from the Cloud? Is it just leaving the Cloud, or in the Cloud, or below the Cloud? This also must be clearly noted.

Before a trade position can be defined, these two factors must be clearly proven to be traveling in the same direction, following the same trend.

The above chart is confirming the signal for an uptrend movement of the price using the Cloud and the chikou span together. Here, the entry position could be made base on the confirmation gotten for the uptrend market price

Explain the use of the Ichimoku indicator for the scalping trading strategy. (Screenshot required)

ANSWER

Scalping with the Ichimoku indicator helps filter out undesirable trading signals because it requires a number of conditions to be met before a buy or sell signal can be confirmed. For effectiveness 15, 5, and 1-minute charts, is the best method where it works well.

For scalping trading strategy, some conditions must be met to make confirmation of our signal:

• The Kijun-sen line (red) must be trending below the Tenkan-sen line (blue) in order to establish a bullish position. This is one of the prerequisites for the bullish trend to be confirmed when this condition is met.
• The price had to have surpassed the "Kumo" cloud; Showing a green color
• Senkou span A (SSA) must be trending above the senkou span B (SSB)

In a simple term
Our bullish trade setup should have price trading above the Kumo, the Tenkan-sen above the Kijun-sen, the Chikou should be above price from 26 periods ago, and the SSA sitting above the SSB to offer an uptrend signal.

With these conditions, a bullish entrance is recommended. A bearish signal should be observed if the condition on the chat is against the mentioned criteria.

The above chart visualizes a bullish movement, and all necessary conditions are pointed to confirm the signal. A buying position could be made here.

Conclusion:

Kumo Cloud is a good professional tool for financial market technical analysis, and when combined with Japanese candlestick patterns, it provides a suitable foundation for constructing a good trading strategy that may work for a long time and provide consistent profits.
It, on the other hand, works flawlessly if you grasp the fundamentals of its operation or if you have enough practical trading expertise to turn trading plans into profit.

Cc: @kouba01