Ichimoku Cloud and ADX with Trailing Stop Loss (by Coinrule)The Ichimoku Cloud is a collection of technical indicators that show support and resistance levels, as well as momentum and trend direction. It does this by taking multiple averages and plotting them on a chart. It also uses these figures to compute a “cloud” that attempts to forecast where the price may find support or resistance in the future.
The Ichimoku Cloud was developed by Goichi Hosoda, a Japanese journalist, and published in the late 1960s. It provides more data points than the standard candlestick chart. While it seems complicated at first glance, those familiar with how to read the charts often find it easy to understand with well-defined trading signals.
The Ichimoku Cloud is composed of five lines or calculations, two of which comprise a cloud where the difference between the two lines is shaded in.
The lines include a nine-period average, a 26-period average, an average of those two averages, a 52-period average, and a lagging closing price line.
The cloud is a key part of the indicator. When the price is below the cloud, the trend is down. When the price is above the cloud, the trend is up.
The above trend signals are strengthened if the cloud is moving in the same direction as the price. For example, during an uptrend, the top of the cloud is moving up, or during a downtrend, the bottom of the cloud is moving down.
DMI is simple to interpret. When +DI > - DI, it means the price is trending up. On the other hand, when -DI > +DI, the trend is weak or moving on the downside. The ADX does not give an indication of the direction but about the strength of the trend.
Typically values of ADX above 25 mean that the trend is steeply moving up or down, based on the -DI and +DI positioning. This script aims to capture swings in the DMI, and thus, in the trend of the asset, using a contrarian approach.
Trading on high values of ADX, the strategy tries to spot extremely oversold and overbought conditions. Values of ADX above 45 may suggest that the trend has overextended and is maybe about to reverse.
This strategy combines the Ichimoku Cloud with the ADX indicator to better enter trades.
Long orders are placed when these basic signals are triggered.
Long Position:
Tenkan-Sen is above the Kijun-Sen
Chikou-Span is above the close of 26 bars ago
Close is above the Kumo Cloud
MACD line crosses over the signal line
-DI is greater than +DI
ADX is greater than 45
Close Position:
3% increase trailing
3% decrease trailing
The script is backtested from December 2022 and provides good returns.
A trading fee of 0.1% is also taken into account and is aligned to the base fee applied on Binance.
Ichimoku_trader
Ichimoku Strategy [CDI]Strategy used in the CDI community that consists of having as a signal to enter long when it crosses the entire Ichimoku cloud .
It is recommended to use the strategy in one hour candles and the profit / loss ratio is 2 to 1 for swing trading, however it can be used at any time frame.
The purpose is to perform a bakctesting quickly by setting the limit and stop in the study settings (Proffit and Loss). It is also possible to deactivate the trades on chart changing the configuration in the settings pannel to visualize more clearly the yellow candles that are marked on the chart to identify the signal of the strategy.
Strategy settings:
- Profit %: approximate profit on each entry
- Loss %: approximate loss limit in each entry
- Crossing Candles: number of candles that establishes the crossing of the Ichimoku clouds
Alerts can be configured.
For more information about the strategy, you can search on YouTube for Hyenuk Chu's video "Cómo construir una buena tasa Riesgo Beneficio"
WARNING:
- For purpose educate only
- The entries are used under your responsibility
