Formalizing Ichimoku Signals with Taichi and DeMarker Filters
Summary
The article proposes Taichi, an indicator derived from Ichimoku Kinko Hyo, to summarize price behavior and distinguish trend from flat conditions. Taichi averages Ichimoku components as a faster trend line, while TaichiFor averages the cloud components as a slower, shifted reference. Moving averages of Taichi smooth these series, and a flat zone is marked when their differences remain below a sensitivity threshold. For a short setup, the described alignment places price below Taichi, Taichi below TaichiFor, and the faster smoothed line below the slower one, outside a marked flat zone.
A DeMarker oscillator with fast and slow moving averages acts as an additional filter and exit aid. The author suggests waiting for its threshold-area signal and moving-average crossover before using Taichi for entry; after entry, an initial turn in the fast average prompts a trailing stop and possible partial exit, while the crossover closes the remainder. The author reports that parameters were chosen experimentally and offers no quantified test results or guarantee of profitability. Settings may vary by instrument and timeframe, and the discussion is a personal method rather than validated performance evidence.
Key ideas
- Taichi combines Ichimoku components into a faster summary line, while TaichiFor averages the cloud as a slower reference.
- Smoothed Taichi lines and their relative spacing are used to identify trend conditions and mark flat zones.
- The proposed short entry requires bearish alignment among price, Taichi, TaichiFor, and the smoothed signal lines.
- DeMarker with two moving averages provides an additional entry filter and a staged exit trigger.
- The suggested parameters were selected experimentally and are not supported by quantified performance tests.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.