Ichimoku Kinko Hyo

14 juin 2022

This indicator is adding to the original indicator Ichimoku Cloud some visual informations.

Be aware of settings that are by default 10, 30, 60, while in the original indicator, default settings are 9, 26, 52. These are commonly consider like "crypto settings".

Tenkan = blue line
Kijun = orange line
SSB = red line

This indicator display three categories of signals that are given by the Ichimoku indicator:
- tenkan / kijun crosses ;
- breaks of mid prices for the different time horizon ;
- bar coloring depending of the trend

Let's review more in deep each of these elements.

Tenkan / Kijun crosses

When the tenkan crossover the kijun, this is called gold cross and it's display by a green triangle at the bottom of the chart.
When the tenkan crossunder the kijun, this is called death cross and it's display by a red triangle at the top of the chart.

I advise to not enter long or short only on this signal because it can be fake, especially during ranges.

To confirm the signal, we need to wait for a movement of the kijun in the same side of the cross. See first arrow on the chart.

Breaks of mid prices

Ichimoku is composed of three han-le lines that displays mid-price of the last candles depending on the settings (10, 30, 60).

Tenkan show us the mid-price of the last 10 candles (short term)
Kijun show us the mid-price of the last 30 candles (mid term)
SSB show us the mid-price of the last 60 candles (long term)

Break of tenkan by the price is the first signal that Ichimoku gives us before a reversal of the trend. This signal is display by a blue triangle.
Then, happened the break of kijun line follow by the break of the SSB. These are display respectively by an orange triangle and a red triangle.

Same advise, don't enter long or short only on break of these lines.
However, tenkan and kijun breaks can be used as exit point.

Bar coloring

The bar coloring display the strength of the trend:
- green candle: strong bullish trend - this happen when the current price is above tenkan, kijun and SSB ;
- blue candle: potential starting of a bullish trend - this happen when the current price is above tenkan and kijun but below the SSB ;
- no colored candle: no trend, market is in a range - this happen when the current price is above tenkan and below kijun and SSB or when the current price is below tenkan and above kijun and SSB ;
- orange candle: potential starting of a bearish trend - this happen when the current price is below tenkan and kijun but above SSB ;
- red candle: strong bearish trend - this happen when the current price is below tenkan, kijun and SSB

How to use to enter / exit trades

First of all, we need confirmations to enter in the side of the trend.
The first signal that the indicator gives us is the break of tenkan, follow by the break of kijun. Candles becomes blue / orange depending of the side.
Then, we wait for a cross of tenkan and kijun. This cross has to be confirmed by a movement of kijun. A flat kijun tell us this is a fake cross.
When the movement of kijun happened in the same side of the cross it is possible to enter a trade if you are aggresive.
Otherwise, you can wait for the third signal to take place: break of SSB, candle become green / red, depending on the side.
You can then enter a trade.
Then hold the position and wait to exit for break of tenkan or kijun, depending on your horizon (short / mid term).

If you have other questions or some features that are missing, pm me. Thanks.

14 juin 2022

Notes de version

Correction d'un bug

15 juin 2022

Notes de version

Adding a background bases on the rsi.
Both green and red background have two states, showing the strengs of the signal given by the rsi.
This could be used to confirm entry or to exit in a shorter term.