Ichimoku Cloud with ADX
Hi there, and welcome to Coinrule’s 10th strategy of the week video. This week’s strategy will feature a variety of technical indicators, including the MACD, the directional movement, index, or DMI, the average directional index, or ADX, and the Ichimoku cloud. This week’s strategy is definitely the most complex that we’ve covered in this series. But as you’ll see in the back testing results later, it can provide some really good returns.
The MACD is a trend-following momentum indicator, which is calculated by subtracting the 26-period EMA from the 12-period EMA. A nine-period EMA of the MACD line is then plotted, known as a signal line.
Ichimoku cloud is a collection of technical indicators that show support and resistance levels as well as momentum and trend direction. It does this by taking multiple averages and plotting them on a chart. It also uses these figures to compute a “cloud” that attempts to forecast for the price may find support or resistance in the future.
The DMI indicates what way price is trending and compares prior lows and highs with two lines drawn between each — the positive directional movement line (+DI) and the negative directional move in line negative (-DI). The trend can be interpreted by comparing the two lines and which line is greater. When the negative DI line is greater than the positive DI line that are more chances that the asset is training in a sustained downtrend and vice versa. Unlike the DMI, the ADX does not give an indication of trend direction instead it gives an indication of the strength of a trend. Values of the ADX above 45 may suggest that the trend is overextended and is maybe about to reverse.
To enter a position, all the following conditions must be satisfied:
1) The blue Tenkan-Sen line is above the dark red Kijun-Sen line,
2) The Chikou-Span is above the close of the previous 26 bars,
3) The close is above the Kumo cloud (shaded area),
4) The negative DI line is greater than the positive DI line and the red line under the ADX is greater than 45.
We also require the MACD crosses above its signal line02:36
First, the Tenkan-Sen must be below the Kijun-Sen, as illustrated here. Additionally, the Chikou-Span must be below the close of the previous 26 bars, unlike when entering. The close must also be below the Kumo cloud, just like this area shown above. Finally, the MACD line must cross under the signal line, similar to this example, but the opposite of the entry condition.
Plus the positive DI line should be greater than the negative DI line, and the ADX is less than 45.
First, on the TradingView page, you can find the entry and exit conditions in the description of the video. They are detailed there for your convenience. Although we have covered them before, they can be complex, so it may be helpful to study them in more detail. If you scroll down, you can add them to your favorite indicators, then apply them to the chart of your choice. In this case, I want to apply them to AVA USDT on the one-hour timeframe. To do this, click on indicators and select from your favorites. However, I won’t do that now as I already have the code and only want to change the default quantity value to 100 instead of 30. This means the strategy will trade with 100% of the available equity instead of just 30%.
You can see that the back-testing data is just for 2022. So, it simulates it works quite well in the bear market as well. So, we get pretty realistic, pretty realistic estimates of how we perform and current market conditions. So, if you’re happy with this, click “add to chart”. And you can see that the strategy performed very, very well on this timeframe and pairing. Feel free to pair play around with different timeframes and different pairings to see if you can find ones that work better, but I’m more than happy with his performance. So, if you’re happy with this, come to Coinrule, create a new rule. And under templates, you’ll find it as Ichimoku cloud with ADX. So, click on add to chart, and then you’ll just have to input a few things so such as how much you want to buy with each buy signal so if there’s a buy signal if TradingView signal is a buy, I want to buy 100 US dollars of AVA with my USDT wallet as a limit order. And then if TradingView signal is a sell i.e., to close a position, and I want to sell 100% of the amount bought of that coin to a USDT wallet as a limit order.
On this, execute 100 times in total. I’m going to name this rule Ichimoku cloud with ADX. So, if you’re happy with this, click “launch” and you’ll get a little preview here. And you’ll also get a webhook URL and a message. So next up to come back to the chart, highlight the strategy . Click the three dots, add alert, and then what you have to do is copy the webhook URL, like this. Come to notifications and paste it in here. Also, see you’re given a message here, copy this, and come in here. Delete this, and paste it in here. Then, click “Create”. Then combined Coinrule, click “launch”. The strategy is now live!
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