Ichimoku Cloud Momentum & Trend Indicator

The Ichimoku Cloud Momentum & Trend Indicator tool visualizes trend changes and momentum strength based on core Ichimoku components to simplify market analysis.

Usage

The indicator can be used to identify current market sentiment and potential trend reversals through its two primary visual components:

• Momentum Columns: The red and green columns represent the aggregate strength of various Ichimoku conditions. Green columns indicate bullish momentum, while red columns indicate bearish momentum. The height of the columns reflects the percentage of conditions met.
• Trend Line: The black diamond step-line suggests the broader trend state. It operates in three states: bullish (top), neutral (center), or bearish (bottom).

Traders can use the zero-line crossovers of the columns as early signals of momentum shifts, while the trend line provides confirmation for sustained moves. The indicator is designed to be complementary to the standard Ichimoku Cloud on your chart rather than a replacement for its support and resistance levels.

Details

The script evaluates six specific conditions based on standard Ichimoku logic:

1. Momentum vs. Cloud: Price position relative to the displaced cloud (Lagging Span).
2. Price vs. Cloud: Current price position relative to the current cloud boundaries.
3. Cloud Color: The relationship between Leading Span A and Leading Span B.
4. TK Cross: The relationship between the Conversion Line (Tenkan-sen) and Base Line (Kijun-sen).
5. Price vs. Conversion: Current price relative to the Tenkan-sen.
6. Price vs. Base: Current price relative to the Kijun-sen.

The indicator offers a "Weighted" mode where certain conditions (like price position relative to the cloud) carry more significance than others (like price vs. the conversion line) in the final calculation.

Settings

• Use weighted value for conditions: When enabled, different Ichimoku components are assigned specific weights to calculate the total momentum score. When disabled, all conditions are treated equally.
• Conversion Line Length: The lookback period for the Tenkan-sen (default is 9).
• Base Line Length: The lookback period for the Kijun-sen (default is 26).
• Leading Span B Length: The lookback period for the Senkou Span B (default is 52).
• Lagging Span: The displacement value for the Chikou Span and the cloud (default is 26).

FAQ

How do I interpret the zero-line?

The zero-line acts as the threshold between bullish and bearish sentiment. Columns above zero indicate that the majority of Ichimoku conditions are bullish, while columns below zero indicate a bearish bias.

What does the diamond line represent?

The diamond line represents the trend state. It enters a bullish state when both price and momentum are above the cloud, and a bearish state when both are below the cloud.

How can I access this indicator?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.