Price Theory

Price Theory [Ichimoku Thread #16 👇🧵]

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1 / 9 📚Price Theory is the last one of the Three Ichimoku Theories. ⌛️Time Theory tells us when the market should reverse or accelerate. 🌊 Wave Theory tells us which should be the next price direction. 📈 Price Theory tells us where the price should go. Price Theory applies different calculation models based on the last wave to provide price targets. ❌🔮 As everything in TA, price targets are not used as predictions, but as forecast, which, if occurs we should look for confluence to consider the end of a move. For example, Price Theory gives us a price X and Time Theory tells us a time for rejection Y. If we see at that point price rejecting, that's a good sign that the price move may be ending. I will provide a detailed example at the end of this thread how to combine the Three Theories for deep market analysis. But first, let's see the different price models Ichimoku provides. They are: V, N, E, E2, E3, E4 and NT. 3⃣To apply any model, we need to determine the last wave with its three points A (start of move), B (end of move) and C (retracement point). Then measure the distance between these points and apply the specific model calculation on these points to get the next potential target.

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2 / 9 V model 📚V model is the most likely target when the last wave has made a relatively deep retrace. 🐂 The formula for bullish targets is: B + (B - C). See below an example: 🐻 The formula for bearish targets is: B - (C - B). See below an example:

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3 / 9 The rest of the models are more likely when the retrace of the last wave is rather shallow. All models can be considered always but higher likelihood is based on the retrace deepness factor. N model 🐂 The formula for bullish targets is: C + (B - A). See below an example: 🐻 The formula for bearish targets is: C - (A - B). See below an example:

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4 / 9 E model E model is the most extended target from the regular models. It often occurs when the previous wave has a minimal retracement (like a bull/bear flag). 🐂 The formula for bullish targets is: B + (B- A). See below an example: 🐻 The formula for bearish targets is: B - (A - B). See below an example:

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5 / 9 NT model ⚠️NT model is a very specific in a sense, that sometimes its target is invalid. I.e., under certain conditions, the bullish target produced by it may be lower than the current price (and vice-versa for the bearish target). In this case, we simply ignore NT and focus on the other targets. 🐂 Bullish formula: C + (C - A) 🐻 Bearish formula: C - (A - C)

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6 / 9 It's also important to note that the middle targets between the different models are also valid targets. For example, V target is 100 and N target is 200. Then 150 is also a target to look for. Or if N target is 200 and E target is 300, then 250 is also a target to consider. We need to observe which target the market respects. If it keeps going in the trend direction after surpassing a target, we consider the next target. Or, we look for other signs like rejection at a time for a cycle low/high, etc...

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7 / 9 ❓How to apply the Three Theories together? In this example I will show a triple confluence which occurred in March 2024 hinting for end of a move based on the Wave, Time and Price theory combined together. First, based on the Wave Theory we observe that after one bullish Sandan we got a bearish I wave and a second Sandan started to form. The wave at March was the fifth, i.e. last wave of the second Sandan. So this was the first hint that we should look for an end of the trend: Then, based on the time cycles, we see that a high is starting to form after a 10 candles cycle which is a valid Kihon Suchi cycle (9 +1) hinting for a reversal: Then, the E target based on the Price Theory gives us a target of $73,176. The pico high was at $73,794 which is a 99.2% accuracy so obviously the target we are looking for. In that case, each one of the Three Theory told us that a major top should be there: based on timings, end of a trend wave structure and a price target. ❌🔮 And that's what Ichimoku is all about: forecast, but not predict. And when the forecast comes, observe for confluence at the current moment and consider that a scenario is indeed playing out. As Goichi Hosoda himself says: we are not here to predict the future, but to observe the present.

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8 / 9 This thread covered Ichimoku's Price Theory. If you find it useful feel free to share to original tweet so the knowledge can reach more people.

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9 / 9 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 14. Time Theory https://x.com/DoctorCatX/status/1951664247093473794 15. Wave Theory https://x.com/DoctorCatX/status/1951717200617992436

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