How to Use Ichimoku + Adaptive Cycle Divergence (ACD) for Identifying Market Waves?

Last Updated on March 16, 2025 by Arif Chowdhury

Are you struggling to pinpoint market waves in your Forex trading?

Do you find yourself overwhelmed by the plethora of indicators out there?

You’re not alone.

As a seasoned Forex trader since 2015, I’ve faced those same questions.

Let’s break it down in a simple, actionable way.

Here’s how you can effectively use Ichimoku and Adaptive Cycle Divergence (ACD) to enhance your trading strategy.

Ichimoku is a versatile indicator that gives you a complete picture of market conditions at a glance.

It consists of five main components:

Tenkan-Sen (Conversion Line): This is the average of the highest high and lowest low over the last 9 periods.
Kijun-Sen (Base Line): This is calculated over the last 26 periods.
Senkou Span A and B: These form the cloud, providing support and resistance levels.
Chikou Span (Lagging Line): This tracks the closing price 26 periods back.

Ichimoku allows you to identify trends, support and resistance, and potential entry and exit points.

ACD is a powerful tool that helps identify the momentum of price movements.

It works by comparing price action against a moving average.

When you see divergence between price and the ACD, it signals potential reversals or continuations.

Using these two tools together forms a robust strategy.

Here’s how you can do it:

Identify the Trend: Use Ichimoku’s cloud to determine if the market is bullish or bearish.
Spot Divergence: Look for ACD divergence against the trend. For example, if the market is in an uptrend and you spot a bearish divergence, it might signal a potential reversal.
Confirm with Ichimoku: If the price moves below the Kijun-Sen, it’s a strong confirmation of a bearish signal.

Statistical studies show that traders who combine multiple indicators often see a 30% increase in their success rate.

This combo of Ichimoku and ACD allows for a clearer market outlook.

You’re not just looking at price; you’re considering momentum and trend together.

As I mentioned earlier, I’ve developed a set of 16 sophisticated trading bots.

These bots utilize the Ichimoku + ACD strategy among other techniques to enhance performance.

Here’s why this matters:

Each bot focuses on major currency pairs: EUR/USD, GBP/USD, USD/CHF, and USD/JPY.
They are internally diversified to minimize correlated losses.
They aim for long-term trades with targets of 200-350 pips.

This layered approach significantly enhances profitability while reducing risk.

And guess what? I’m offering this EA portfolio completely FREE.

You can find out more about it here.

To effectively use Ichimoku and ACD, follow these steps:

Set Up Your Charts: Ensure you have Ichimoku and ACD indicators on your trading platform.
Monitor Multiple Time Frames: Check H4 or daily charts for a broader perspective.
Keep an Eye on News: Major economic events can impact trends and momentum, so stay informed.
Practice Risk Management: No strategy is foolproof. Set stop-losses and manage your risk accordingly.

Using Ichimoku and ACD can transform your trading.

By combining these two powerful tools, you gain a clearer understanding of market movements.

And with my trading bots, you can automate this process for even better results.

I highly recommend checking out the best forex brokers I’ve tested.

You can find them here.

This way, you’ll have the right environment to implement your strategies effectively.

With the right tools and mindset, you can navigate the Forex market like a pro.