DenP Ichimoku Interpreter (DII)

A simple indicator using Ishimoku as a basis, giving entry and exit signals.

Components of the Ichimoku Cloud

The Ichimoku system consists of multiple lines that help traders understand market trends, momentum, and potential reversals.
1. Tenkan-Sen (Conversion Line) - Blue

Formula: (Highest High + Lowest Low) / 2 over the last 9 periods (default).
Purpose: Measures short-term trend direction.
Interpretation:
Upward movement: Indicates bullish momentum.
Downward movement: Indicates bearish momentum.
Flat line: Indicates consolidation.

2. Kijun-Sen (Base Line) - Red

Formula: (Highest High + Lowest Low) / 2 over the last 26 periods (default).
Purpose: Represents medium-term trend.
Interpretation:
Price above Kijun-Sen: Bullish signal.
Price below Kijun-Sen: Bearish signal.
Flat Kijun-Sen: Market in consolidation.

3. Senkou Span A (Leading Span A) - Light Green

Formula: (Tenkan-Sen + Kijun-Sen) / 2, plotted 26 periods ahead.
Purpose: Forms one of the Ichimoku Cloud boundaries.
Interpretation:
If Senkou Span A is rising, the market is bullish.
If Senkou Span A is falling, the market is bearish.

4. Senkou Span B (Leading Span B) - Light Red

Formula: (Highest High + Lowest Low) / 2 over the last 52 periods, plotted 26 periods ahead.
Purpose: Forms the second boundary of the Ichimoku Cloud.
Interpretation:
If price is above the cloud, the market is in a strong uptrend.
If price is below the cloud, the market is in a strong downtrend.
If price is inside the cloud, the market is consolidating.

5. Kumo (Cloud)

The area between Senkou Span A and Senkou Span B is shaded.
Green Cloud (Span A above Span B): Bullish trend.
Red Cloud (Span B above Span A): Bearish trend.
The thickness of the cloud represents market volatility.

6. Chikou Span (Lagging Line) - Green

Formula: Current closing price plotted 26 periods back.
Purpose: Confirms trend direction.
Interpretation:
Chikou Span above price 26 periods ago: Bullish.
Chikou Span below price 26 periods ago: Bearish.

Buy and Sell Conditions

The indicator generates buy and sell signals based on Ichimoku components.
1. Kijun Cross (Medium-Term Trend)

Buy Signal: When the closing price crosses above the Kijun-Sen (red line).
Sell Signal: When the closing price crosses below the Kijun-Sen.

2. Cloud Breakout (Senkou Span Cross)

Buy Signal:
When Senkou Span A is above Senkou Span B, and the price crosses above the cloud.
Indicates a strong uptrend.
Sell Signal:
When Senkou Span B is above Senkou Span A, and the price crosses below the cloud.
Indicates a strong downtrend.

3. Chikou Span Confirmation (Momentum Confirmation)

Buy Signal:
If Chikou Span (green) crosses above past price action, it confirms a bullish trend.
Used to validate Kijun and Cloud Buy signals.
Sell Signal:
If Chikou Span crosses below past price action, it confirms a bearish trend.

Visual Signals

The indicator plots triangles on the chart to indicate buy and sell signals:

Kijun Buy Signal: Upward triangle (green).
Kijun Sell Signal: Downward triangle (red).
Cloud Buy Signal: Upward triangle (green) near the cloud.
Cloud Sell Signal: Downward triangle (red) near the cloud.
Chikou Confirmation Buy: Upward triangle (green, confirming previous signals).
Chikou Confirmation Sell: Downward triangle (red, confirming previous signals).

Additional Features

Customizable Colors & Settings: Users can adjust colors, time periods, and display settings.
On-Chart Table: Displays current trend interpretations for easy reference.

How to Use the Indicator?

Check the Cloud Position:
Price above the cloud = bullish.
Price below the cloud = bearish.
Price inside the cloud = consolidation.

Look for Kijun Crosses:
Buy when price crosses above Kijun-Sen.
Sell when price crosses below Kijun-Sen.

Confirm with Chikou Span:
If Chikou Span supports the buy/sell signal, it's more reliable.

Use Cloud Breakouts for Trend Reversals:
If price moves from below to above the cloud = strong buy.
If price moves from above to below the cloud = strong sell.