Ichimoku Cloud Oscillator with Smoothed Price Lines
Summary
This indicator adapts Ichimoku components into a separate oscillator-style display. It applies a T3 smoothing process to closing prices over the conversion, base, and second lagging-span periods, then uses displaced values to form a cloud midpoint and cloud height. The distance between the smoothed conversion line and the midpoint is compared with half the absolute cloud height. Positive distance is colored green, negative distance red, and values within the cloud gray; the cloud’s sign is shown separately as a thinner line. The accompanying strategy enters long or short when the distance is positive or negative.
The document lists indicator parameters and a Bitcoin futures backtest interval, but gives no performance statistics or comparison with standard Ichimoku signals. Its description presents color changes as trend and direction cues, not as validated predictive evidence. The displayed strategy has no stated stop loss, position sizing, or explicit handling of sideways markets beyond producing no directional entry while the oscillator is zero. Results may also depend on smoothing and displacement choices, so the example is best treated as an indicator construction to investigate rather than a demonstrated trading edge.
Key ideas
- The indicator smooths closing prices with a T3 process before constructing Ichimoku-style lines.
- It measures conversion-line distance from the cloud midpoint relative to half the cloud height.
- Positive and negative distances generate long and short entries, while gray marks a zero-distance state.
- The cloud height provides a separate view of the relationship between the leading lines.
- The document supplies test settings but no reported performance results or risk controls.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.