Ichimoku Cloud

Author: Optuma Team Last updated: May 4, 2022 19:02

Overview

The Ichimoku Cloud indicator was developed before World War II by a Tokyo newspaper writer. It is designed to display support and resistance levels, trend direction, and entry/exit points.

The general idea behind this tool is that if price action is above the cloud, the overall trend is bullish, and if below the cloud, the overall trend is bearish.

There are also moving averages (the Tenkan and Kijun lines) which act like a MACD crossover signal with the Tenkan crossing from underneath the Kijun as a bullish signal, while crossing overhead giving a bearish signal.

There are 5 parts which make up the Ichimoku Cloud:

Tenkan Line: (highest high + lowest low)/2 calculated over last 9 periods.
Kijun Line: (highest high + lowest low)/2 calculated over last 26 periods.
Chikou Span: closing prices plotted 26 time periods back.
Senkou Span A: (Tenkan line + Kijun Line)/2 plotted 26 time periods ahead.
Senkou Span B: (highest high + lowest low)/2 calculated over past 52 time periods, sent 26 periods ahead.

When Span A is greater than Span B the cloud is green (bullish) and red when B > A.

MASKUMO Large

To add the tool to your chart, select the tool from the Averages tool group, and left-click on the chart or indicator on which you wish to add the tool. Optuma will then draw the tool using the default settings.

Scripting Function: ICHIMOKUCLOUD()

Note

Because the Ichimoku Cloud plots in to the future the values have to be locked to the corresponding price bars when scanning. For example, to scan for when the last closing price is above the upper band of the cloud use the following:

//Set Cloud Plot
V1 = ICHIMOKUCLOUD().CloudBandUpper;
//Lock Plot to Bar
V2 = BARINDEX() > 0;
V3 = IF(V2 == 1,V1,0);
//Is Close > Plot
CLOSE() > V3

Actions & Properties

Actions

Copy Data to Clipboard: Will copy the tool’s values to the clipboard which can then be inserted into a spreadsheet, for example, allowing for further analysis.

Add Technical Alert: When selected, a Technical Alert will be created for the selected security.

Add to Toolbar: Adds the selected tool to your custom toolbar.

Apply Settings to All: When multiple Ichimoku Cloud tools have been applied to a chart, page or workbook, this action can be used to apply the settings of the one selected to other instances of the tool. This is a great time saver if an adjustment is made to the tool - such as line colour - as this allows all the other Ichimoku Cloud tools in the chart, page or entire workbook to be updated instantly.

Copy Tool: Allows you to copy the selected tool, which can then be pasted onto a different chart window.

Move to Back: If the tool is displaying in front of other tools or indicators clicking this action will move the tool view to the background.

Move to Front: If the tool is displaying behind other tools or indicators on the chart, clicking this action will bring the tool to the forefront.

Restore Default Settings: Click this action if you have adjusted the default settings of the tool, and wish to return to the standard properties originally installed with Optuma.

Save Settings as Default: If you have adjusted any of the tool’s properties (colour, for example) you can save the adjustments as your new default setting. Each time you apply a new Ichimoku Cloud to a chart, the tool will display using the new settings.

Delete: Deletes the tool from the chart.

Properties

Tool Name: Allows you to adjust the name of the tool, as it’s displayed in the Structures Panel.

Tenkan Periods: The number of bars that are used in the calculation of the Tenkan line.

Kijun Periods: The number of bars that are used in the calculation of the Kijun line.

Span B Periods: The number of bars that are used in the calculation of the Senkou Span B line.

Kumo Offset: Allows you to manually adjust the offset of the Kumo plot (set to 26 bars forward by default).

Chikou Offset: Allows you to manually adjust the offset of the Chikou plot (set to 26 bars backwards by default).

Tenkan Plot Style: This field expands to display the following options:

Plot Style - Adjusts the display style of the Tenkan Line of the Ichimoku Cloud tool. There are 6 options available: Line, Dot, Histogram, Step, Shaded, Shaded Step.
Line Style - When Line is selected as the Plot Style, the Line Style property allows you to adjust the type of line displayed. There are 8 options available: Solid, Dots, Dash, Dash Dots, Long Dash, Long Dash Dot, Long Dash Dot Dot and Stippled.
Line Width - Allows you to adjust the width of the Tenkan Line of the Ichimoku Cloud tool. Moving the slider bar to the right increases the thickness of the line.
Line Colour - Allows you to adjust the colour of the Tenkan Line of the Ichimoku Cloud tool.
Visible - Un-tick this checkbox to hide the Tenkan Line of the Ichimoku Cloud from the chart.

Kijun Plot Style: Expands to display the line properties of the Kijun line. The properties are identical to those listed in the Tenkan Plot Style.

Chikou Plot Style: Expands to display the line properties of the Chikou line. The properties are identical to those listed in the Tenkan Plot Style.

Up Cloud Style: This field expands to display the following options:

Line Style - The Line Style property allows you to adjust the type of line displayed. There are 8 options available: Solid, Dots, Dash, Dash Dots, Long Dash, Long Dash Dot, Long Dash Dot Dot, Stippled.
Line Width - Allows you to adjust the width of the Up Cloud Line. Moving the slider bar to the right increases the thickness of the line.
Line Colour - Allows you to adjust the colour of the Up Cloud Line.
Transparency - Use this slider bar to adjust the transparency of the Up Cloud line, moving the slider to the left will increase the transparency of the tool.
Fill Transparency - Use this slider bar to adjust the transparency of the Up Cloud shaded area, moving the slider to the left will increase the transparency of the tool.
Visible - Un-tick this checkbox to hide the Up Cloud area of the Ichimoku Cloud from the chart.

Down Cloud Style: Expands to display the properties of the Down Cloud Style. The properties are identical to those listed for the Up Cloud Style.

Offset: Moves the tool forward or backwards in time. The offset is measured in bars, so a value of 2 will push the tool forward 2 bars and -2 will move the tool back 2 bars.

Tool Transparency: Use this slider bar to adjust the transparency of the tool. Moving the slider to the left will increase the transparency of the tool.

Visible: Un-tick this checkbox to hide the tool from the chart.

Show in Price Scale: When selected the current Ichimoku cloud values will be displayed in the Price Scale.