Ichimoku Additions

[perryg]

1. How do I differenciate between a "Rubber band" triangle and a "Pullback" triangle. I know the difference, but how have you marked them on the chart, and how does it work in real time.

2. In the left upper corner of the chart there is "Ichi UP" or "Ichi Down". What is the trigger for this.

[cclsys]

1. How do I differenciate between a "Rubber band" triangle and a "Pullback" triangle. I know the difference, but how have you marked them on the chart, and how does it work in real time.

2. In the left upper corner of the chart there is "Ichi UP" or "Ichi Down". What is the trigger for this.

PerryG: you are quite right, it is not all clearly marked! I shall see if I can put together a chart.

That said: if you read through the code slowly, all might become clear. Then again, maybe not since there are so many options!

The gold and blue dots are from the IchiClouds. If you scroll your chart to the right you will see a cross is happening then but if you have your chart with the last bar near the edge you won't see this happening 'in the future'.

The rubber bands are (in my default setup) a Plum color. They just indicate that the price has run away from from the Tenkan (or is it Kijun?) using an ATR-based calculation. It is not part of the Ichi method.

It works in real-time to warn that perhaps the current move has got ahead of itself and it might be time to take profits or tighten stops and/or avoid entering new positions in that direction until there has been a pullback.

[perryg]

Bollinger Bands in Ichilines

What is the basis for the calculations of your Bollinger Bands. It is not the usual price as it would then be above and below the price range. Your BB are a parrallel BELOW or ABOVE the acutal price range.

Please explain

[cclsys]

What is the basis for the calculations of your Bollinger Bands. It is not the usual price as it would then be above and below the price range. Your BB are a parrallel BELOW or ABOVE the acutal price range.

Please explain

If you look in the code you will see that they are narrow bands with a standard deviation of .24 versus the usual 2. They can be handy with pull-back type trades and also offer a comparison between the Ichimokus which are based on the median price of the HighestHigh-LowestLow and a normal moving average.

[cclsys]

1. How do I differenciate between a "Rubber band" triangle and a "Pullback" triangle. I know the difference, but how have you marked them on the chart, and how does it work in real time.

2. In the left upper corner of the chart there is "Ichi UP" or "Ichi Down". What is the trigger for this.

Sorry, I was running out when answering the first time:

the pullback triangle is a more precise pattern whereas the Rubber Band is a general condition of the market being over-extended (possibly). The condition for the pullback (short example) is if the Ichi Trend is bearish but there is a higher low for x bars (determined by that input PBCountNr), then a triangle is plotted until the condition no longer exists, i.e. the low has been penetrated.

The Trend condition is:

// Trend Text section - shows up or down trend as text in Upper Left of chart screen
if (trendtext)
{
if (wasshort) {DrawTextFixed("TrendDown", " Ichi Down", tPosition, Color.Black, textFont, Color.Goldenrod, Color.SteelBlue, 7);} else {RemoveDrawObject("TrendDown");}
if (waslong) {DrawTextFixed("TrendUp", " Ichi Up", tPosition, Color.Black, textFont, Color.SteelBlue, Color.Goldenrod, 7);} else {RemoveDrawObject("TrendUp");}
if (side)
{ DrawTextFixed("Side", " Ichi Side", tPosition, Color.Black, textFont, Color.Green, Color.Lime, 7);
RemoveDrawObject ("TrendUp"); RemoveDrawObject ("TrendDown");}
else {RemoveDrawObject("Side");}
}

+++++++++++

So you have to look in the code to see the waslong and wasshort.

if (((TenkanSen[0] > Kijunsen[0]) || (TenkanSen[0] > TenkanSen[1] && Kijunsen[0] == TenkanSen[0] )) && wasshort )
{uptrend = true; waslong = true; wasshort = false;}

So basically it is determined by either Tenkan being <> Kijun or Tenkan coming up to equal the Kijun or coming down to equal the Kijun. Of course you can change this if you prefer.

There a many different backcolor options. You can just play with them and use the code to figure out what they are doing.

The way I used this indicator was partly as a means to learn how to program various ideas, but also as a way to see what different things looked like on the chart. Obviously there are far too many options to play around with in terms of system development or actual trading. But if you take a little time just turning things on and off etc. I am sure that very quickly you will settle down to a few of the options that you like and after that never really have to touch it again.

Personally I think the pullback arrows are not necessary because you can see this condition for yourself quite easily; however, if you want to review taking pullbacks, it makes it much easier if they are up there on the chart to get an idea of how they do, or perhaps different rules to apply than the simple default ones.

BackColor is also totally optional. Why I have so many choices? Because I find backcolor the easiest condition to program in so if I had a new idea for a trend condition to add extra info to the basic Ichis I just added it in. When all is said and done, the basic Ichis are just about as good as anything else. It all comes down to discipline and money management.

The Ichis are good at working with trending conditions. If you have a market that trends regularly, they are very helpful. You don't need to change the periods, you don't need oscillators. The relations between the past and future and present are nicely laid out with the T&K, the Clouds and the Chikou. As a standalone set of indicators it's pretty good. But again, it's more about the trader than the indicators.

One setup I do recommend when using them in terms of high probability.

If a move tops out, say, and then gradually moves not only into a bearish T&K but price is below BOTH the current Clouds and the LT clouds, AND you get a clear breakthrough of key support, you might be beginning a nice strong move down. I call this is a 'full bear trend' when everything is happening BENEATH both clouds, and a 'full bull trend' when everything is happening ABOVE both clouds.

[cclsys]

OK, here's a chart showing my idea above. We can also use it for any questions you have.

I have marked various rough zones to illustrate the idea, with either orange ellipses or arrow lines.

On the far left we have a break above both clouds but
a) the clouds are still going down (not a big deal) but more importantly
b) the Kijun (Lime Green) is still well below them and in fact the Tenkan (red) did not get over the upper cloud until the mkt was already moving back down into them again.
c) as it happens, we have the Rubber-Band arrows indicating the thrust up might well snap back. Which it did.

Market goes back down but does not get anywhere. Indeed, there is a typical condition you see during consolidations with the short and LT clouds sort of containing the price between them. But market did not go back down in any convincing fashion.

Then market tries going up again. And then at second ellipse it makes

a) a significant SR breakout up (first Arrow line)
b) at same time (not a co-incidence) Plum Arrow is a K2 cross (my invention) which is when the K2 (long-term Kijun dark green) crosses above the ST Cloud lead line which it had been tracking (i.e. the predicted Cloud line = the current actual K2 line = no new significant highs or lows = market is not trending strongly.

Note how during this consolidation period around 1115 that long pullbacks could have been used for quick scalps successfully but the short pullbacks were all losers. This indicates underlying bullish tendencies so the PB arrows can be used as indicators in some sense, not just entry signals, i.e. how they do tells us things about the market, both in terms of direction and regularity/predictability. In a strongly trending market, most pullbacks work (although where you place your stop etc. might get you stopped out but after the event you can see that they would work). Markets where the pullbacks really don't work are conflicted and usually in consolidation/rotation thus not suitable for trend-type entries, only counter-trend type entries. At any time between the 10-30 to 12-30 congestion period (between clouds), selling highs and buying lows would have worked okay with 2-3 bar scalps.

c) after quick but convincing run-up, mkt retraces to the breakout level (second arrow) where we have a nice pullback arrow.

d) that pullback into a clear SR price zone and the second one later (not marked) around 14.21 were pretty good low-risk signals. All main lines are above both clouds. It is a 'full bull trend'.

Of course there are many, many other things you can do with the Ichis. But this is a very powerful setup that happens all the time in all markets in all time-frames indicative of a possible strong move that will have legs, i.e. not one to fade immediately and a good one to put on multiples to get a good runner with, or at least hold a single for a while.

The advantage of the pullback entry is that there is less of a chance of a break-even stop being hit after it goes in your favor. Also, the initial risk is knowable (beneath pivot low when long, above pivot high when short) unless one wants to scale-in against adverse moves during more determined corrective moves.

Personally, I would remove the Bollingers. I was just happy I could figure out how to paint in the region between them; also for a while I was working with them as a pullback or entry setup and wanted to compare them to the Ichis. I think they don't give any meaningful extra information and just clutter up the chart. Some people might prefer them to the Ichis though, in which case just make the T&K transparent. Up to you, it's open software!

[perryg]

Thank you very much for the explanations. You have done a wonderful job.

[Albaz]

Ninja 7

Thank you very much. You have done a wonderful job.
I wonder if it'd be working on NT 7, It's not working for me.

[cclsys]

I don't run 7 and also have stopped trying to code in Ninja so somebody else will have to make those changes. Glad you liked it!

[coolfutures]

cclsys

Thanks for this indicator . You have done wonderful job. Is it possible to have entries and exit be clearly defined , no guess work at all ?

[cclsys]

update

I have tried twice to reply and it won't go through.

Suffice to say that the only 'signal' is the Ichi Tenkan-Kijun cross (red line, light green line) and that is a reversing system, i.e. always either long or short.

It went through for some reason. Here is some of the older text:

coolfutures:

as mentioned above I'm not really into tweaking anything in Ninja anymore and also this indicator has too much stuff in it since I was partly programming it in order to learn how to program anything at all in Ninja (never did manage to code a single working strategy!).

That said though, there are only really two signal arrows, everything else is extra stuff like the Chikou Span breakout (Chikou line from past breaking through up or down the price also in past), my pullback triangles, the pink arrows noting when one of the longer term medians crosses above or below one of the Cloud lines (not in the official Ichi method but something I have noticed happens when a longer-term price breakout is occurring and so a potentially good longer term trend indicator).

The actual signals are just the basic, and official, Ichi Cross which is when the short term (red) Ichi (Tenkan, 9 period) crosses over the (green) Ichi (Kijun, 27). At that point an arrow is plotted up or down and I guess you could say it is a reversing system in that it is always either long or short.

Now I seem to remember I had a problem with the crossing over language which I never fixed and the way it is now if the Ichi setup was bearish and the Tenkan comes up to the Kijun and just touches it or equals it, that is a crossover and I am not sure if this is valid in terms of the official method which might well require a full crossover, i.e. the Tenkan going to being higher in price than the Kijun.

This really is meant as an indicator, i.e. visual aid rather than a system per se.

I think someone at the Big Mike's Forum has updated the coding to Ninja 7.


Current pic shows short term bullish (above ST cloud) and longer term bearish. (Note: this is a short term tick chart.)

For fun: the longer term Ichi turned bullish (lighter gold up arrow) which is why there are now lighter gold pullback up triangles so I put in a buy order. We'll see!

The longer term cross is when the lighter green Kijun crosses above the darker green Kijun2 (which is 3* 27 = 81), so this is part of having the two time frames on the chart at once.

(Note: this is a very slow pre-market situation, so not one that most of us would usually trade I suspect, but anyway.)

Pic 3: thrust up but the short term Ichi does a bearish cross. So still very iffy. That said, 10 ticks in 10 minutes ain't bad considering. A BE stop could already be put in for scalper types to avoid any loss whilst going for more, or could be scaling out with multiple positions etc.

Pic 4: has moved up past ST resistance (donchian line / old high) and the short term Ichi has crossed back up, a whipsaw which is now bullish and looks like our target will be hit. Definitely stop to BE at this point.

Pic 5: more convincingly moved through old resistance and now a Pink LT arrow up indicating potential LT trend change. (On 5 minute chart we are in the midst of a very steep, bearish sell off by the way, so chances are this will all correct back soon and personally I would bail out with quick profits here or have a tight trailing stop).

Also note the Light Gold Diamond on the closing price in penultimate bar denoting the LT Chikou Span which is occurring on the left of the chart with the further-in-past darker pink Chikou breaking above price at that point in the past.

This signal/trade got 19 ticks possible in this slow market doing what is essentially a counter trend trade but using Ichi approach with short term tick chart.

Note also that price is now between the ST and LT clouds. Not always, of course, but often you get choppy action as one trend is over but a new one has not really formed and/or resumption of previous trend - in this case bear - not yet underway. So it is an iffy zone which is why for strong trends I prefer to see price above/below both clouds.

[cclsys]

reply cont.

OK, got to my limit of 5 so continuing...

Looks like BE stop will be hit and should/have got out on tighter trail stop. Yup, got hit whilst typing.

Anyway, that was a series of examples of the indy in action. HOpe you enjoyed it.

[cclsys]

Later on, above both clouds

OK. So later on we are above both clouds triggering a breakout buy signal (for which there is no indicator arrow or anything) and immediately you get the fastest, deepest move in a few hours. Almost 30 ticks in about 1 minute.

Now the pink triangles are indicating an overbought condition so probably best to get out or place tight trail stop. I stayed in a little longer to meet a profit target based partly on the market and partly on the need to recover $1000.00 in hypothetical losses from trades taken earlier on in the choppy zone between the clouds where it is usually not a good idea to trade. Another facet of this indicator which is helpful.

Again, note how when price broke out of the two-cloud situation, it moved dramatically. I have seen this so often in so many markets that it is a) clearly not co-incidence and b) shows that there is something about the underlying Ichimoku method that truly makes sense.

You could take this double-cloud approach and basically live off it if you have the patience to wait for those setups and are also able to weather those times where, like any approach, it fails.

Last Pic (8) I have highlighted the longer term system cross (ellipses) and the shorter term (normal) system crosses (rectangles), both good for more than 60 ticks. Now in the case of the shorter terms ones I have picked the best example and ignored many which got whipsawed. The longer term one didn't get whipsawed on this chart but of course it does happen as with all such things.

One rule I sometimes use when using the Ichis in this short term sort of chart is to have pattern confirmation to the signal, i.e. 2 closes in the same direction as the signal or whatever.

Anyway. Hope this was all enjoyable.

Another one. Pic 9. Here I have shown with ellipse and rectangle a trend change. Note how speed accelerates (RPM indy in Panel 2) just as the second, confirming ST buy signal (rectangle) is triggered. And we are above both clouds again, even though not making new highs for the period. Also coming up on the official opening time so this is still an iffy period to be trading, but the charts - for the purposes of illustration - are fine of course.

Pic 10: and off we go again, another acceleration and a Rubber Band pink arrow which is usually a good place to exit or place tight trail stop.

Almost like clockwork, eh?

[cclsys]

Tick versus Time Chart

Now this is interesting. note how after the recent fast runup the Kijun (light green) median is so close to current highs? That is because the bars were forming so very quickly. Past 27 bars in about 5 mins versus the usual 30. This makes the Ichi system far more responsive than the time-based bars. Which can be either good or bad, but is something to keep in mind when picking chart.

[cclsys]

another double cloud run

Another run above both clouds, this one with nice LT signal at the kick-off..

Beginning and end marked with ellipses: LT entry, ST exit at convergence of the T and K after a decent run.

Note how Kijun trends down for first time after beginning of run up / signal and just after the TK cross down marked by second ellipse.

And finally (Pic 13), as I leave computer for a while, where it looks like its going next using Ichi (and VWAP). Down through ST cloud and to the LT cloud top and VWAP support.

On way out the door and Pic 14, prediction correct to the bar and tick:

BINGO!!!: