ICHIMOKU indicators for day trading ES MINI | Traders Hideout

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ICHIMOKU indicators for day trading ES MINI

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Tenkan-sen and Kijun-sen (blue and red line) are midlines of a Donchian channel and are used in a similar way as moving averages. The cloud is built from displaced Donchian midlines and represents the higher timeframe.

I am looking at the following filters:

(1) Price vs. Tenkan (price above or below a 9-period Donchian midline)
(2) Price vs. Kijun (price above or below a 26-period Donchian midline)
(3) Tenkan vs. Kijun (this is similar to a moving average cross)
(4) Price vs. Kumo (price sitting above, below or inside the cloud)
(5) Price vs. Kumo midline (price above or below the midline of the cloud)
(6) Senkou A vs. Senkou B (this information is not read for the current bar, but 26 bars ahead)
(7) Chikou span vs. price (this information is not read for the current bar, but 26 bars behind)
(8) Chikou span vs. Kumo ((this information is not read for the current bar, but 26 bars behind)

This makes up for 8 different trend filters, which may be combined to calculate a composite trend. It is difficult to incorporate visual elements - like the shape of the cloud - into this system.

I am not using all of the filters above, as they are redundant, but prefer to focus on 3 or four of them. The chart below shows signals based on

(1) Price vs. Kijun
(4) Price vs. Kumo
(6) Senkou cross

When all of the three trend filters are long, paintbars are green. When all of them are short, paint bars are red. When they are in contradiction, paint bars are gray. The first green or red paint bar generates an entry signal in the direction of the new trend. Double arrows denote a new trend after a reversal, single arrows show trend continuation after a sideways move. The screenshot shows a 60-min chart of 6E 09-18.

The Ichimoku system is a trend following system and will generate false signals in sideways markets. However, it works very well in trending markets.

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Last edited by Fat Tails; July 24th, 2018 at 03:04 AM.
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