The MACD is a tried-and-true indicator that has served as the backbone for countless trading strategies out there.
To spice things up, I decided to integrate some Ichimoku concepts with MACD to tap into market sentiment better.
Rather than reinventing the wheel by explaining how to use Ichimoku from scratch, I highly recommend checking out an awesome resource at Ichimoku Wiki. This will give you a solid understanding of the indicator.
On the attached chart, I’ve provided a basic view of price movements to give you an idea of how to read the information presented.
This indicator utilizes the same auto-shading code I use to create floating shades. Make sure to allow DLLs for this feature to work, and you can either wait for a new tick or right-click to edit without changing anything, then close the chart for the clouds to float.
Since MACD deals with both positive and negative values, I’m limited in the number of buffers I can use for shading every possibility. As a result, while you’ll always see the Senkou A and B lines (the boundaries of the Kumo Clouds), there may be occasional minor shading when zero line crossovers happen. Don’t worry about it; it’s just something to keep in mind.
This approach is a fresh way to validate MACD signals, and I’m genuinely pleased with the insights it offers. Ichimoku has a bit of a learning curve, but it’s definitely worth your time, and I believe this indicator will prove similarly beneficial. It might seem a bit intimidating at first, but the payoff is worth the effort.
Initially, I ran the M5 and M15 strategy tester using a simple do-nothing EA just to observe how the indicator behaved. You’ll be amazed at how well it narrates the market story over time!
I’ve almost wrapped up my work on the Stochastic and CCI Ichimoku versions, and I released the ADX_Ichimoku on my site a while back.
Cheers,
Brooky
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