About the Ichimoku Signal Indicator
The Ichimoku Signal indicator for MT4 is a streamlined version of the traditional Ichimoku system.
It uses a single red signal line to highlight market direction, making it easier for traders to spot bullish and bearish conditions.
Price above the signal line suggests a bullish bias, while price below indicates a bearish bias.
Buy signals occur when price crosses the line from below and closes above, while sell signals occur when price crosses from above and closes below.
For higher accuracy, traders are encouraged to combine the indicator with an oscillator like MACD or Slow Stochastic.
The indicator also displays volatility, daily range, and other market insights to help traders better assess potential trade opportunities.
Its simplicity allows traders to focus on trend direction while incorporating complementary tools for confirmation.
Free Download
Download the “alternative-ichimoku.mq4” MT4 indicator
Key Features
- Simplified Ichimoku with a single red signal line.
- Price above the line is bullish; below is bearish.
- Buy and sell signals are generated when price crosses the line.
- Works well with oscillators for trend confirmation.
- Displays volatility, daily range, and other market insights.
Indicator Chart
The Ichimoku Signal chart shows price relative to a single red line.
Traders can easily see bullish and bearish zones, while the oscillator confirms potential entry points.
The chart helps identify trend direction and potential trade setups quickly.
Guide to Trade with Ichimoku Signal Indicator
Buy Rules
- Confirm price is above the red signal line.
- Use an oscillator (MACD or Slow Stochastic) to ensure oversold conditions.
- Enter a buy trade when price crosses above the signal line and closes.
- Ignore buy signals if the trend appears bearish.
Sell Rules
- Confirm price is below the red signal line.
- Use an oscillator to ensure overbought conditions.
- Enter a sell trade when price crosses below the signal line and closes.
- Ignore sell signals if the trend appears bullish.
Stop Loss
- For buy trades, place the stop-loss below the nearest swing low or support level.
- For sell trades, place the stop-loss above the nearest swing high or resistance level.
Take Profit
- Close buy trades when price closes below the signal line.
- Close sell trades when price closes above the signal line.
- Optional: exit partially at key support/resistance levels.
Ichimoku Signal + 49/89 Colored EMA MT4 Forex Strategy
This MT4 strategy combines the Ichimoku Signal MT4 indicator and the 49/89 Colored EMA MT4 indicator.
The Ichimoku Signal indicator provides trade signals based on price closing relative to the red Ichimoku signal line.
A bullish trade is taken when price closes above the red line, while a bearish trade is taken when price closes below it.
The 49/89 Colored EMA indicator confirms trend direction: two green EMA lines indicate bullish momentum, and two red EMA lines indicate bearish momentum.
This strategy is suitable for M15 and H1 charts and works well on major currency pairs with clear trending behavior.
Buy Entry Rules
- The price closes above the red Ichimoku Signal line, indicating a bullish signal.
- Both EMA lines on the 49/89 Colored EMA indicator are green, confirming the bullish trend.
- Enter a long trade immediately after the close above the Ichimoku line with EMA confirmation.
- Place a stop loss a few pips below the nearest swing low or below the Ichimoku line.
- Take profit at the next resistance level or allow the trade to run while price remains above the Ichimoku line and EMA lines stay green.
Sell Entry Rules
- The price closes below the red Ichimoku Signal line, indicating a bearish signal.
- Both EMA lines on the 49/89 Colored EMA indicator are red, confirming the bearish trend.
- Enter a short trade immediately after the close below the Ichimoku line with EMA confirmation.
- Place a stop loss a few pips above the nearest swing high or above the Ichimoku line.
- Take profit at the next support level or allow the trade to run while price remains below the Ichimoku line and EMA lines stay red.
Advantages
- Combines price-based Ichimoku signals with trend confirmation from EMAs for higher accuracy.
- Clear entries and exits based on trend alignment and signal confirmation.
- Reduces false signals during trending markets.
- Flexible take profit management by following price action rather than fixed risk-to-reward ratios.
Drawbacks
- Less reliable in sideways or choppy markets where price fluctuates around the Ichimoku line.
- Requires patience to wait for both Ichimoku and EMA confirmation before entering trades.
- False signals can occur if trend reversals are sudden and EMAs have not adjusted yet.
Example Case Study 1 (EURUSD M15 bullish trade)
On EURUSD M15, the price closed above the red Ichimoku Signal line at 1.1050.
Both EMA lines were green, confirming the bullish trend.
A buy trade was entered at 1.1052. Stop loss was placed at 1.1040, below the Ichimoku line.
Price moved to 1.1078, capturing 26 pips.
The bullish trend continued, and the trade was allowed to run to 1.1085, gaining an additional 7 pips.
Example Case Study 2 (GBPUSD H1 bearish trade)
On GBPUSD H1, the price closed below the red Ichimoku Signal line at 1.2655.
Both EMA lines were red, confirming the bearish trend.
A short trade was entered at 1.2654. Stop loss was placed at 1.2670, above the Ichimoku line.
Price declined to 1.2620, capturing 34 pips.
The bearish trend remained intact, allowing further movement down to 1.2610 for an additional 10 pips.
Strategy Tips
- Focus on trading during trending market sessions for more reliable signals.
- Wait for both Ichimoku close and EMA color confirmation before entering trades.
- Monitor higher time frame trends to align trades with the overall market direction.
- Use trailing stops to lock in profits while trends remain strong.
- Avoid entering trades near major news releases to prevent false breakouts.
- Adjust stop loss and profit targets based on recent swing highs and lows for each currency pair.
Download Now
Download the “alternative-ichimoku.mq4” Metatrader 4 indicator
FAQ
How does the Ichimoku Signal simplify the traditional Ichimoku?
Instead of multiple lines, this version uses a single signal line to indicate bullish and bearish conditions, making trend direction easier to follow.
Should I use an oscillator with this indicator?
While the signal line alone works, traders often use MACD, Slow Stochastic, or other oscillators to confirm oversold or overbought conditions for better trade timing.
How can trades be exited?
Traders can exit when price crosses the signal line in the opposite direction, when an opposite signal occurs, or using personal support/resistance or price action strategies.
Summary
The Ichimoku Signal indicator for MT4 simplifies trend detection, helping Forex traders identify bullish and bearish opportunities with a single signal line.
Price above the line suggests potential buy trades, and price below indicates potential sell trades.
When paired with oscillators or other confirmation tools, it provides actionable signals and clear guidance for entries and exits.
Traders can quickly assess market bias, track price momentum, and make informed decisions across different timeframes, improving trade timing and consistency.
