Ichimoku Cloud Strategy for Trading View

Bymchernyshov@gmail.com

Creating a trading strategy based on the Ichimoku Cloud involves using its various components to identify potential trading opportunities. Below is a step-by-step guide to a strategy you can use on TradingView:

Ichimoku Cloud Components

  • Tenkan-sen (Conversion Line): 9-period average.
  • Kijun-sen (Base Line): 26-period average.
  • Senkou Span A (Leading Span A): Average of Tenkan-sen and Kijun-sen, plotted 26 periods ahead.
  • Senkou Span B (Leading Span B): 52-period average, plotted 26 periods ahead.
  • Chikou Span (Lagging Span): Closing price plotted 26 periods back.

Basic Trading Strategy

This strategy focuses on trend-following and using the Ichimoku Cloud to identify entry and exit points.

1. Setup in TradingView

  • Add the Ichimoku Cloud indicator to your chart on TradingView.
  • Use the default settings (9, 26, 52) for the Ichimoku Cloud.

2. Entry Rules

  • Buy Signal (Long Position):
    • Price Above Cloud: The current price must be above the Ichimoku Cloud.
    • Bullish Cross: Tenkan-sen crosses above Kijun-sen.
    • Cloud Color: The cloud (between Senkou Span A and Senkou Span B) should be green, indicating an uptrend.
    • Chikou Span: The Chikou Span should be above the price line, confirming bullish momentum.
  • Sell Signal (Short Position):
    • Price Below Cloud: The current price must be below the Ichimoku Cloud.
    • Bearish Cross: Tenkan-sen crosses below Kijun-sen.
    • Cloud Color: The cloud should be red, indicating a downtrend.
    • Chikou Span: The Chikou Span should be below the price line, confirming bearish momentum.

3. Exit Rules

  • For Long Positions:
    • Stop Loss: Place a stop loss slightly below the Kijun-sen (Base Line) or below the cloud.
    • Take Profit: Consider taking profit when the price closes below the Tenkan-sen or when the Tenkan-sen crosses below the Kijun-sen.
  • For Short Positions:
    • Stop Loss: Place a stop loss slightly above the Kijun-sen or above the cloud.
    • Take Profit: Consider taking profit when the price closes above the Tenkan-sen or when the Tenkan-sen crosses above the Kijun-sen.

4. Additional Filters

  • Volume Confirmation: Use volume indicators to confirm the strength of the trend.
  • Timeframe Consideration: This strategy works well on daily and 4-hour charts, but you can adjust it according to your preferred timeframe.

5. Example TradingView Script (Pine Script)

6. Backtesting & Optimization

  • Backtest the strategy on historical data to understand its performance.
  • Adjust parameters like stop loss, take profit levels, and timeframe based on the backtest results.

7. Risk Management

  • Use a risk-reward ratio that suits your trading style (e.g., 1:2).
  • Never risk more than a small percentage of your trading capital on a single trade.

This strategy is trend-following and works well in trending markets. In sideways or choppy markets, consider using additional indicators or avoiding trades altogether.

Modified Trading View Strategy



//@version=4
// Any timeFrame/pair , Ichimoku + Daily-Candle_cross + HULL-MA_cross + custom Hull/MacD combination 420 special blend
strategy("Max Ichimoku2", shorttitle="max ich2", overlay=true, initial_capital=10000, default_qty_type=strategy.percent_of_equity, max_bars_back=2999, default_qty_value=1, commission_type=strategy.commission.cash_per_contract,commission_value=0.5,slippage=1)
Period=input(title="Double HullMA X Period",type=input.integer,defval=14, minval=1)

//GC 200/440, NQ 200/220
SL = input(defval=-200, title="Stop Loss in $", type=input.float, step=0.001)
TP = input(defval=240, title="Target Point in $", type=input.float, step=0.001)
res = input(title="Candle X Resolution", type=input.resolution, defval="D")
price=input(title="Source of Price",type=input.source,defval=close)

//NQ 26, GC 2.2, CL 0.1
luft=input(title="Luft from Cloud", type=input.float, defval=26)
hma1=hma(price, Period)
hma2=hma(price[1], Period)

b=hma1>hma2?color.lime:color.red
c=hma1>hma2?color.green:color.red
d=hma1>hma2?color.red:color.green
D1=security(syminfo.tickerid,  res, price, barmerge.gaps_off, barmerge.lookahead_off)
D2=security(syminfo.tickerid,  res, price[1], barmerge.gaps_off, barmerge.lookahead_off)
conversionPeriod = input(9, minval=1, title="Conversion Line Period")
basePeriod = input(26, minval=1, title="Base Line Period")
laggingSpanPeriod = input(52, minval=1, title="Lagging Span 2 Period")
displacement = input(26, minval=0, title="Displacement")
donchian(len) => avg(lowest(len), highest(len))
conversionLine = donchian(conversionPeriod)
baseLine = donchian(basePeriod)
leadLine1 = avg(conversionLine, baseLine)
leadLine2 = donchian(laggingSpanPeriod)
LS=price, offset = -displacement
MACD_Length = input(9)
MACD_fastLength = input(12)
MACD_slowLength = input(26)
//MACD = hma(price, MACD_fastLength) - hma(price, MACD_slowLength)

MACD = hma(price, MACD_slowLength)

aMACD = hma(MACD, MACD_Length)

//if (strategy.openprofit>TP)
//    strategy.close_all(comment="close all profit")



//plot(cross(hma1, hma2) ? hma1 : na, style=plot.style_circles, color=b, linewidth = 4)// remove the "//" from before the plot script if want to see the indicators on chart
longCondition =   crossover(price,leadLine1) //crossover(low ,leadLine1) and leadLine1>leadLine2 //and close<open
//MACD>aMACD and price> leadLine1
//cross(hma1, hma2)
//hma1>hma2 and  D1>D2 and price>hma2 and leadLine1>leadLine2 and MACD>aMACD

if (longCondition)
    strategy.entry("Long",strategy.long,1,limit=leadLine1)

if(close-strategy.position_avg_price>2*luft )
    strategy.exit("Exit Long", from_entry="Long",stop=close-luft)

shortCondition =   crossunder(price,leadLine1) //crossunder(high, leadLine1)  //and leadLine1<leadLine2 //and close>open  leadLine2-luft
//crossover(leadLine1, leadLine2) and
//MACD<aMACD and price< leadLine1
//hma1<hma2 and D1<D2 and price<hma2 and leadLine1<leadLine2 and MACD<aMACD

if (shortCondition)
    strategy.entry("Short",strategy.short,limit=close)//
    //strategy.exit("Short Exit", from_entry="Short", profit=TP)

//strategy.exit("Exit Short", from_entry="Short", trail_points=5,trail_offset=luft)
if(strategy.position_avg_price-close>2*luft )
    strategy.exit("Exit Short", from_entry="Short",stop=close+luft)


//strategy.exit(trail_price)

if (strategy.openprofit>TP or (strategy.openprofit>0 and shortCondition))
    strategy.close("Long",comment="Profit",alert_message="Long Close Profit")
//strategy.position_size>0 and strategy.openprofit<SL and hma1>hma2 and price>hma2 // or hma1<hma2 and price<hma2
if (strategy.openprofit<SL)
    strategy.close("Long",comment="SL ",alert_message="Long Close SL")

closeshort=strategy.openprofit>TP or strategy.openprofit<SL
// strategy.position_size>0 and strategy.openprofit<SL and hma1<hma2 and price<hma2 // or hma1>hma2 and price>hma2
if (strategy.openprofit>TP or (strategy.openprofit>0 and longCondition) )
    strategy.close("Short",comment="Profit ",alert_message="Short Close Profit")
if (strategy.openprofit<SL)
    strategy.close("Short",comment="SL ",alert_message="Short Close SL")


a1=plot(hma1,color=c)// remove the "//" from before the plot script if want to see the indicators on chart
a2=plot(hma2,color=c)// remove the "//" from before the plot script if want to see the indicators on chart
//plot(shortCondition? hma1-10 : na, style = plot.style_circles, color=color.red, linewidth = 4)// remove the "//" from before the plot script if want to see the indicators on chart

//plot(cross(hma1, hma2) ? hma1 : na, style=plot.style_circles, color=b, linewidth = 4)// remove the "//" from before the plot script if want to see the indicators on chart
//plot(longCondition ? hma1-10 : na, style=plot.style_circles, color=color.green, linewidth = 4)// remove the "//" from before the plot script if want to see the indicators on chart


plot(leadLine1,  color=#0496ff, title="Conversion Line")// remove the "//" from before the plot script if want to see the indicators on chart
plot(baseLine, color=#991515, title="Base Line")// remove the "//" from before the plot script if want to see the indicators on chart
//plot(price, offset = -displacement, color=color.black, title="Lagging Span")// remove the "//" from before the plot script if want to see the indicators on chart
p1=plot (leadLine1, offset = displacement, color=color.green,  title="Lead 1")// remove the "//" from before the plot script if want to see the indicators on chart
p2=plot (leadLine2, offset = displacement, color=color.red,  title="Lead 2")// remove the "//" from before the plot script if want to see the indicators on chart
fill(p1, p2, color = leadLine1 > leadLine2 ? color.green : color.red)// remove the "//" from before the plot script if want to see the indicators on chart
// remove the "//" from before the plot script if want to see the indicators on chart

Overall successful strategy generating profit factor 1.101 and percent profitable 39.77%

That resulted in $12,505 profit of NQ futures trading in the backtest shown below.

Example trades / Backtest results (hypothetical)

The figures below are taken from the TradingView Strategy Tester screenshot shown on this page for this Ichimoku strategy. They are backtested (simulated) results on NQ (Nasdaq-100 E-mini futures, CME), 3-minute chart. The exact test date range is not shown in the report. Commission and slippage settings are not shown in the report.

  • Net profit: +$12,505.00
  • Total closed trades: 875
  • Win rate (percent profitable): 39.77%
  • Profit factor: 1.101
  • Max drawdown: $10,549.50
  • Average trade: $14.29
TradingView Strategy Tester results for the Ichimoku strategy on NQ 3-minute

CFTC Rule 4.41 – Hypothetical performance disclosure: HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN. Past performance is not necessarily indicative of future results. See our full CFTC hypothetical performance disclosure and futures risk disclosures.

Similar Posts