SKE-Labs Ichimoku Cloud Trading
Ichimoku Kinko Hyo provides trend, momentum, and S/R in one indicator system.
Components
| Component | Formula | Use |
|---|---|---|
| Tenkan-sen | (9H + 9L) / 2 | Fast signal line |
| Kijun-sen | (26H + 26L) / 2 | Slow signal line |
| Senkou A | (Tenkan + Kijun) / 2, plotted 26 ahead | Cloud boundary |
| Senkou B | (52H + 52L) / 2, plotted 26 ahead | Cloud boundary |
| Chikou Span | Close plotted 26 periods back | Confirmation |
Cloud (Kumo) Analysis
| Cloud Color | Meaning |
|---|---|
| Green (A > B) | Senkou A above Senkou B; bullish-context feature |
| Red (A < B) | Senkou A below Senkou B; bearish-context feature |
| Thin/thick cloud | Relative spread between Senkou spans; test any S/R interpretation |
Signals
TK Cross (Tenkan/Kijun)
- Bullish feature: Tenkan crosses above Kijun; record cloud location as context
- Bearish feature: Tenkan crosses below Kijun; record cloud location as context
Price vs Cloud
- Above cloud = bullish bias
- Below cloud = bearish bias
- Inside cloud = overlap state; apply the calibrated policy
Chikou Span Confirmation
- Chikou above price (26 bars ago) = bullish
- Chikou below price (26 bars ago) = bearish
Component State Checklist
| Condition | Bullish | Bearish |
|---|---|---|
| Price position | Above cloud | Below cloud |
| TK cross | Bullish | Bearish |
| Chikou span | Above price | Below price |
| Cloud ahead | Green | Red |
These components share the same price history and are not independent votes. Preserve the four states but assign strength only if a calibrated model supports it.
Workflow
Get at least 120 closed candles to calculate components and their plotted shifts:
get_candles(symbol=<symbol>, exchange=<exchange>, interval=<interval>, count=120)Compute rolling highest-high/lowest-low midpoints. Plot Senkou spans 26 bars ahead and Chikou 26 bars back. When backtesting, compare each decision timestamp only with values computable then; never use the future plotted location as future information.
Assess price versus the correctly aligned current cloud, not the unshifted calculations
Record TK cross and Chikou relation as correlated features
Apply the predeclared closed-bar entry and structural invalidation; a line touch is not enough.
Mark on chart:
draw_chart_analysis(action="create", drawing={ "type": "support", "points": [ {"time": <start_time>, "price": <kijun_price>}, {"time": <end_time>, "price": <kijun_price>} ], "options": {"text": "Kijun Support"} })
Evidence and Validation
- Treat the setup as a testable hypothesis, not a prediction. Define thresholds, entry, invalidation, and exit before evaluating outcomes.
- Calibrate on the same instrument, venue, session, and timeframe. Use closed candles and a held-out or walk-forward sample; record every variant tried.
- Include spread, fees, slippage, borrow or funding, partial fills, and latency. Reject the setup when net expectancy is not positive or depends on one narrow parameter.
- Return observed inputs, missing data, cost assumptions, entry, invalidation, exit, and a valid, watch, or no-trade status.
- Research basis: The technical-analysis evidence review finds results vary by market and testing design; Ichimoku settings and confirmation rules require the same out-of-sample scrutiny.
Key Rules
- Treat inside-cloud status as a testable filter, not a universal prohibition.
- Test 9/26/52 and chosen timeframes on the intended session; no 4H minimum is universal.
- Use cloud edges as candidate coordinates and stop only at thesis invalidation.
- Do not convert component agreement directly into confidence or size.
Related Skills
- multi-timeframe-analysis — Ichimoku across timeframes for alignment
- moving-average-crossover — TK cross is analogous to MA crossovers; combine for confirmation