Time Theory

Time Theory [Ichimoku Thread #14 🧵👇]

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1/14 As we already know, Ichimoku is not just an indicator. It's an entire system comprised of two indicators and three theories for PA analysis. In fact, if you master the Three Theories you can trade even without using the indicator, only by reading the naked candles. But the indicator is so powerful and easy to use that once you learn it properly, you can't stop using it. The reason why the indicator is so amazingly accurate is because of the original settings, incorporating in it the Time Theory. "Time is everything in the market" - says Goichi Hosoda, Ichimoku's inventor. Time is more important than price in Ichimoku. Because time determines price. That's why from the Three Theories, the Time Theory is by far the most important one.

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2/14 ❓What does Time Theory do? Time Theory introduces the concept of the so-called Henka-Bi candles, studies the time cycles between them and forecasts in the future the time for the next occurrence of the next Henka-Bi candle using specific models for time cycles forecasts. ❓What is a Henka-Bi candle? In Japanese Henka-Bi means "day of change". So on the daily chart it's a candle representing a change, but on other timeframes obviously it could be a week of change a month of change etc... Henka-Bi could be either of two things: 1⃣a top or a bottom (cycle high/cycle low) 2⃣a big candle accelerating in the direction of the trend In a range, Henka-Bi at the highs and at the lows is normally a cycle high/low. Or, it may be the breakout from the range candle, for example the candle making the kumo twist.

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3 / 14 During a downtrend, a Henka-Bi forecasted as a high will almost always be a cycle high. And during an uptrend, a Henka-Bi foretasted as a low will almost always be a cycle low. ⚠️But if you have forecasted a Henka-Bi as a high during an uptrend, or as a low during a downtrend, you need to study carefully the other timeframes and look for further confluence for whether this would be a reversal candle, or an acceleration in the direction of the trend.

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4 / 14 ❓How to forecast the time of the next Henka-Bi candle? To do this we need to apply one of the four models for time cycles forecast Ichimoku provides: 1⃣Kihon Suchi 2⃣Taito Suchi 3⃣Jugi 4⃣Kakugi Each of them has their own rules and as long as we find a pattern matching the rules we can make a forecast. 📚We can measure the distance between the candles in all possible four ways: low to low, low to high, high to low, or high to high. It's important to note that Ichimoku does not tell us which exactly highs and lows to look for. And if you learn the four models you will see that different time cycles using them appear all the time on many levels on the chart, zoom-in, zoom-out, overlapping with each other, high to low, low to low etc... From my experience to keep things simple it's most useful for forecast the highs measuring high to high and the lows: low to low - unless it's impossible to find a pattern that way. To find a pattern and make a forecast, we need to count the number of candles within one cycle. ⚠️Ichimoku counts the current candle as candle number #1, but TradingView counts it as #0. For this reason, when you use the date range tool, you must start counting one candle earlier.

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5 / 14 🫴📚Now let's see which are different models for time cycles forecasts. From the four models the most important and most frequently occurring one by far is Kihon Suchi. The Kihon Suchi model uses the Kihon Suchi numbers. The Kihon Suchi numbers are special numbers which were discovered after a long and profound research. They are naturally appearing in the time cycles in all assets. You can think of them as the natural breathing rhythm of the markets, in the same way the human body has normally 12-20 breaths per minute. You should learn them like the axioms in math. The basis of the KS numbers are the three simple KS numbers: 9, 17 and 26. They are also used in the main indicator: 9 for Tenkan Sen, 26 for Kijun Sen and Chiko Span, SSA equals to 17.5 (9+26)/2. 9 is the minimum base cycle, 17 and 26 are derived from it. From these simple numbers, composite Kihon Suchi numbers can be derived. ⚠️📔 It's important to note that Hosoda clearly says in the original books that any number which is a combination between 9, 17 and 26 is a valid Kihon Suchi number. 🧮 And theoretically we can generate custom Kihon Suchi numbers using the guidelines formulas. 🫴With that being said, over the years with practice the following KS numbers have been established as the most common ones that appear most frequently in the markets: 9, 17, 26, 33, 42, 51, 65, 76, 83, 97, 101, 129, 172, 200, 226, 257, 676 📚To detect and forecast a valid Kihon Suchi cycle, there are two rules: 1⃣The length of the cycle must be a Kihon Suchi number 2⃣There is no gap between the cycles, i.e. the start of the new cycle is at the same candle which ends the previous cycle. There is no need to detect a previous Kihon Suchi cycle to establish a KS pattern. Any cycle occurring for the first time with a KS number is a valid one. ⚠️Important: when it comes to time cycles you can't expect 100% exact number fit for a Kihon Suchi or any other number. The acceptable deviation is +-2. This applies to all cycles, also to the cycles which don't use Kihon Suchi. For example 15 to 19 is a valid 17. So whenever you look for a specific cycle or "equal" cycle always assume +-2. Here you can see examples of Kihon Suchi cycles from high to high and low to low, on multiple levels (zoom-in / zoom-out):

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6 / 14 Taito Suchi Taito Suchi is the only model which doesn't use Kihon Suchi numbers. Their length can be any number, even if not a Kihon Suchi one. This model has two rules: 1⃣ The cycles must have equal length 2⃣There is no gap between the cycles On this chart you can see two Taito Suchi cycles followed by two Kihon Suchi one (+-2 deviation allowed as always)

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7 / 14 Jugi The Jugi model has three rules: 1⃣ The cycles overlap one over another 2⃣Each cycle has equal length 3⃣The cycle length must be a Kihon Suchi number Here on the chart you can see Jugi cycles (overlapping 33):

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8 / 14 Kakugi The Kakugi model has four rules: 1⃣ The cycles must have a gap between themselves 2⃣ Each cycle must have equal length 3⃣ The cycle length must be a Kihon Suchi number 4⃣ The gap between the cycles must not be bigger than the half of the cycle length Here you can see Kakugi cycles with 42:

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9 / 14 ❓How to use the time cycles to make a forecast? As you see, the four Ichimoku models can find plenty of different cycles in the chart. The question is, which cycles to look for to make an optimal forecast. Here are some hints for that: First, you should look for Kihon Suchi. It's the most important and the most frequently occurring pattern. In crypto I'd say it appears well above 90% of the time, close to 100%. As you know for Kihon Suchi there is not even a requirement for the past cycle to be Kihon Suchi as well. But if you see that the market has been respecting Kihon Suchi cycles before that this still gives you extra confidence that this pattern will appear again. Then you look for the first lowest Kihon Suchi number which may appear on the chart. For example, if the current high is at 37, the next Kihon Suchi is 42 +-2. If you see a fresh high on candle #61, obviously it's not 51 because it's beyond the 51 +-2 deviation, but it's the earliest next one: 65 +-2. In the video below you can see how in this case the cycle high comes exactly on candle #65.

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10 / 14 If you see that the last cycle is a non-Kihon Suchi number, theoretically the next cycle can be either Taito Suchi with the same number, or any Kihon Suchi. From my experience, in cases like this, the most likely scenario is to appear Taito Suchi. But it's not uncommon the two (or more) Taito Suchi cycles to be eventually joined in a bigger Kihon Suchi. Jugi and Kakugi I would rather use if I can't find any other pattern or if I'm looking for confluence. One important thing to understand is that if the market forms an obviously deep cycle low/high on an unexpected place (like we expect Kihon Suchi 33 for example but it comes on 37), theoretically, this can be indeed eventually the final cycle low/high. With that being said, Kihon Suchi appears so often on the chart, that unless this is indeed an ultimate top or bottom, it's very likely that a bigger cycle with a higher high / lower low come and eventually engulf it into a valid Kihon Suchi. You can see below such an example with 14, 14 (Taito Suchi) and 26 Kihon Suchi (with the +-2 deviation):

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11 / 14 The time cycles are recommended to be used on the daily timeframes and higher. But I've discovered myself that they work pretty well also on lower timeframes and can give you an excellent idea of whether a local bottom/top is in or not:

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12 / 14 Lastly, here is one practical example where I explain how I used the time cycles on multiple timeframes to detect the $XRPBTC bottom on its exact day on the 12th of November 2024: https://x.com/DoctorCatX/status/1856395358890344864 🗓️ On the monthly, June was a 42 cycle which is an exact KS number so we assume it's a valid low - and the final bottom may be in. However, after this the chart didn't go straight up but dipped and started to form another low briefly after that. So assuming that the 42 monthly cycle holds, we needed just to find the bottom of the higher low. For this, we zoom-in at the weekly cycles and we see three cycles: 172, 9 and 24. 172 and 9 are exact KS numbers, 24 is 26-2 so acceptable deviation from 26. So all these weekly lows were valid and the low could have been set within this week, or up to 4 weeks ahead (as 26+2 extends up to 28). So now to be more precise as 4 weeks is too long period of time, we zoom into the daily cycles. And there we see a confluence between three big cycles: 40, 131 and 100. With the acceptable +-2 deviation, they give us 42, 129 and 101 all of which are KS numbers. Well pretty much that's it. TA is always about probabilities and exactly for this reason we seek as much confluence we can. On the 12th of November we had a confluence between multiple time cycles on three timeframes, price reaction and rising volume - so it was obvious that this should be the bottom and the big run was finally starting.

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13 / 14 This thread covered Ichimoku's Time Theory. If you found it valuable feel free to share the original tweet of the thread (not this one) so it could reach more people.

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14 / 14 Previous lessons 1. The Ichimoku TA system https://x.com/DoctorCatX/status/1807703250189099208 2. Tenkan Sen https://x.com/DoctorCatX/status/1810173264020328553 3. Kijun Sen https://x.com/DoctorCatX/status/1813659904688685089 4. Real and fake TK crosses https://x.com/DoctorCatX/status/1815295282793390287 5. SSA https://x.com/DoctorCatX/status/1817833046088843737 6. SSB https://x.com/DoctorCatX/status/1822907741918175638 7. Kumo https://x.com/DoctorCatX/status/1827755204713865373 8. Chiko Span https://x.com/DoctorCatX/status/1830540632428827015 9. Sanyaku Signals https://x.com/DoctorCatX/status/1834528626513006837 10. Forecast lines https://x.com/DoctorCatX/status/1938597387024343199 11. Trend and range https://x.com/DoctorCatX/status/1945938009322336349 12. Key levels for visit and reversal https://x.com/DoctorCatX/status/1946341925679743281 13. Bull and bear traps https://x.com/DoctorCatX/status/1946533654651666694

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