Ichimoku Buy & Sell Signals
May 28, 2021
The Ichimoku Buy & Sell Signals indicator provides a comprehensive visual representation of the traditional Ichimoku Kinko Hyo system, featuring color-coded signals for crossovers between the Tenkan and Kijun lines.
Usage
The indicator can be used to identify trend direction and potential entry points based on the interaction between the Conversion Line (Tenkan) and the Base Line (Kijun).
- Bullish Signal: A green circle appears when the Tenkan line crosses above the Kijun line, indicating potential upward momentum.
- Bearish Signal: A red circle appears when the Tenkan line crosses below the Kijun line, indicating potential downward momentum.
- Cloud (Kumo) Interpretation: The area between Lead 1 and Lead 2 forms the cloud. When price is above the cloud, the trend is generally considered bullish; when below, it is considered bearish.
Details
This implementation calculates the standard Ichimoku components using Donchian channels (the average of the highest high and lowest low over a specific period).
- Tenkan (Conversion Line): A fast-moving average of the price midpoints over the shortest period.
- Kijun (Base Line): A slower-moving average of the price midpoints.
- Senkou Span A (Lead 1): The midpoint between the Tenkan and Kijun lines, plotted forward in time.
- Senkou Span B (Lead 2): The midpoint of price over a longer duration, also plotted forward.
The indicator uses a default "displacement" to shift the leading spans forward, creating the "cloud" which acts as dynamic support and resistance.
Settings
- Conversion Line Length: Sets the lookback period for the Tenkan line (default is 20).
- Base Line Length: Sets the lookback period for the Kijun line (default is 60).
- Lagging Span 2 Length: Sets the lookback period for the Senkou Span B (default is 120).
- Displacement: Determines how many bars forward the lead lines are projected (default is 30).
FAQ
How do I interpret the colored circles? The circles represent "TK Crosses." A green circle is a bullish crossover, while a red circle is a bearish crossunder.
Can I set alerts for these signals? Yes, the script includes built-in alert conditions for both bullish and bearish crossovers that trigger on the bar close.
How can I access the Ichimoku Buy & Sell Signals? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.
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