Ichimoku With Signals

The Ichimoku With Signals indicator provides a comprehensive variation of the traditional Ichimoku Cloud by identifying specific buy and sell signals based on Tenkan-sen and Kijun-sen crossovers relative to the Kumo Cloud.

Usage

The indicator can be used to identify trend changes and momentum shifts through its signal markers.

• Strong Signals: Large triangles indicate crossovers that occur on the favorable side of the Kumo Cloud (e.g., a bullish crossover occurring above the cloud).
• Neutral Signals: Medium-sized triangles indicate crossovers occurring within the boundaries of the Kumo Cloud.
• Weak Signals: Small triangles indicate crossovers occurring on the unfavorable side of the Kumo Cloud (e.g., a bullish crossover occurring below the cloud).

Traders can use these signals to gauge the conviction of a trend reversal or continuation, with strong signals typically carrying higher technical weight than weak ones.

Details

The script calculates the standard components of the Ichimoku Kinko Hyo system using Donchian channels:

• Tenkan-sen (Conversion Line): The midpoint of the highest high and lowest low over the specified Tenkan periods.
• Kijun-sen (Base Line): The midpoint of the highest high and lowest low over the specified Kijun periods.
• Senkou Span A (Leading Span A): The average of the Tenkan-sen and Kijun-sen, displaced forward.
• Senkou Span B (Leading Span B): The midpoint of the highest high and lowest low over the Chikou periods, displaced forward.
• Chikou Span (Lagging Span): The current closing price plotted backward.

The primary logic for signals is the "TK Cross." The strength of these crosses is determined by the position of the cross relative to the displaced Senkou Spans (the Kumo Cloud).

Settings

• Tenkan-sen Periods: Determines the lookback period for the Conversion Line (default 9).
• Kijun-sen Periods: Determines the lookback period for the Base Line (default 26).
• Chikou Periods: Determines the lookback period for Senkou Span B (default 52).
• Offset: Controls the displacement for the Senkou Spans and Chikou Span (default 26).

FAQ

How do I interpret the different triangle sizes?

The sizes represent signal strength. Large triangles are strong signals (cross occurs outside the cloud in the trend direction), medium triangles are neutral (cross occurs inside the cloud), and small triangles are weak (cross occurs on the opposite side of the cloud).

Can I use this for any timeframe?

Yes, the Ichimoku With Signals indicator is applicable to any timeframe, though it is traditionally used on daily or weekly charts for trend identification.

How can I access Ichimoku With Signals?

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