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Ichimoku Theories

By LuxAlgoMay 16, 2024

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Ichimoku Theories implements the complete framework behind the cloud: the five-line Ichimoku Kinkō Hyō with its kumo, plus the three Ichimoku theories Goichi Hosoda built beneath it — Time, Wave, and Price Theory. Rather than stopping at the lines, it detects and forecasts time cycles, classifies wave structures, and projects price targets, turning Ichimoku into a full market-analysis workflow.

How to Trade the Ichimoku Theories?

  • Lines and kumo: Tenkan Sen (9-period midpoint), Kijun Sen (26), Senkou Spans A/B projected 26 periods ahead, Chikou plotted 26 back; the kumo acts as a support and resistance area.
  • Time cycles: detected from the Kihon Suchi numbers (9, 26, and their combinations) with up to seven detection modes; forecasts project future cycle windows using Kihon Suchi or Taito Suchi patterns.
  • Waves: basic I, V, and N waves plus complex P, Y, and W formations classify market structure, with overlap detection for completeness.
  • Price targets: a developing N wave generates basic and extended target levels to frame expectations.

The intended workflow is integration — establish the current cycle and wave, forecast the next window, and let targets frame the move. The framework is trend-following at heart, so it reads best in trending conditions, and its projections are insight for planning rather than predictions.

Ichimoku Theories Settings

  • Time Cycle Mode: choose among seven cycle detection modes, including swings, highs, Kijun, and waves.
  • Forecast Pattern Selection: switch between Kihon Suchi and Taito Suchi projection patterns, with anchoring options on detected cycles.
  • Swing Length: how significant a move must be to register as a swing.
  • Line lengths and offsets (Tenkan, Kijun, spans), wave classes, and target lines each carry their own toggles.

Frequently Asked Questions

Do I have to use all three theories at once?

No — every layer toggles independently, so you can run the classic lines and kumo alone and add cycles, waves, or targets as they earn a place in your process. The theories were meant to reinforce one another, though, and the integrated read is where the tool is strongest.

Is there a simpler option for plain trend bias?

If all you need is a directional regime, SuperTrend prints one trailing stop line that flips direction with the market. Ichimoku Theories occupies the other extreme: a complete analytical framework with time, structure, and target layers.

What does access cost?

Nothing — the LuxAlgo Library carries it free of charge. It also runs inside Quant, LuxAlgo's AI, letting you explore the cycle and wave tools hands-on.

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