About the Ichimoku Cloud Signals Indicator
The Ichimoku Cloud Signals indicator for MT4 is a trend-following buy and sell tool built around the Ichimoku Cloud concept and enhanced with two simple moving averages.
By blending these elements, the indicator creates a colored cloud that helps traders quickly identify bullish and bearish market conditions.
When price trades above the cloud, the market is considered bullish.
In this situation, traders focus on buy opportunities that align with the upward trend.
When price moves below the cloud, bearish conditions dominate and sell opportunities become the primary focus.
The indicator draws a blue cloud to signal bullish momentum and a magenta cloud to signal bearish momentum.
These cloud color changes highlight potential trend shifts and continuation phases, allowing traders to react without overanalyzing multiple indicators.
Free Download
Download the “dat-cloud-indicator.mq4” MT4 indicator
Key Features
- Combines Ichimoku Cloud logic with two simple moving averages.
- Displays bullish and bearish cloud signals directly on the price chart.
- Blue cloud highlights bullish market conditions.
- Magenta cloud highlights bearish market conditions.
- Helps filter trades based on price position relative to the cloud.
Indicator Chart
The Ichimoku Cloud Signals indicator overlays a colored cloud on the price chart.
Blue clouds appear during bullish phases, while magenta clouds form during bearish phases.
The chart highlights trend direction and potential buy or sell signals based on cloud transitions.
Guide to Trade with Ichimoku Cloud Signals Indicator
Buy Rules
- Open a buy trade when price is trading above the cloud.
- Enter long when the indicator draws the start of a blue cloud.
- Confirm that recent candles remain above the bullish cloud.
- Focus on buy setups that follow the direction of the blue cloud.
Sell Rules
- Open a sell trade when price is trading below the cloud.
- Enter short when the indicator draws the start of a magenta cloud.
- Confirm that recent candles remain below the bearish cloud.
- Focus on sell setups that align with the magenta cloud direction.
Stop Loss
- For buy trades, place a stop loss below the lower edge of the cloud.
- For sell trades, place a stop loss above the upper edge of the cloud.
Take Profit
- Close buy trades when price closes back inside or below the cloud.
- Close sell trades when price closes back inside or above the cloud.
Ichimoku Cloud Signals and Best Forex Scalping MT4 Strategy
This MT4 scalping strategy combines the trend identification of the Ichimoku Cloud Signals MT4 Forex Indicator with the precise entry signals of the Best Forex Scalping MT4 Indicator.
The strategy is designed for short-term trades on M1 and M5 charts.
It is suitable for scalpers who want clear trend confirmation along with exact entry points to capture fast moves.
The Ichimoku Cloud Signals indicator uses colored clouds to show trend direction.
A blue cloud indicates a bullish trend and suggests looking for buy opportunities while a magenta cloud indicates a bearish trend and suggests looking for sell opportunities.
The Best Forex Scalping Indicator provides arrow signals, with blue arrows signaling buy entries and red arrows signaling sell entries.
Using both indicators together increases the probability of entering trades aligned with the prevailing trend.
This strategy works best on major forex pairs and gold during active trading sessions and helps scalpers focus on high-probability setups while avoiding countertrend trades.
Buy Entry Rules
- The Ichimoku Cloud must be blue, confirming a bullish trend.
- Wait for a blue arrow from the Best Forex Scalping indicator.
- Enter a buy trade at the close of the candle where the blue arrow appears.
- Place the stop loss below the most recent swing low or the lower boundary of the cloud.
- Keep the buy trade open while the cloud remains blue and no red arrow appears.
- Close the trade immediately if the cloud changes to magenta or a red arrow appears.
Sell Entry Rules
- The Ichimoku Cloud must be magenta, confirming a bearish trend.
- Wait for a red arrow from the Best Forex Scalping indicator.
- Enter a sell trade at the close of the candle where the red arrow appears.
- Place the stop loss above the most recent swing high or the upper boundary of the cloud.
- Keep the sell trade open while the cloud remains magenta and no blue arrow appears.
- Close the trade immediately if the cloud changes to blue or a blue arrow appears.
Advantages
- Combines strong trend confirmation with precise entry signals for higher probability trades.
- Helps avoid countertrend trades by filtering entries with the cloud trend direction.
- Suitable for fast scalping on M1 and M5 charts during active market sessions.
- Works reliably on multiple currency pairs and gold without complex settings.
- Allows traders to ride intraday trends and capture quick moves efficiently.
Drawbacks
- Requires constant monitoring of charts for timely execution of trades.
- Cloud color changes and arrow reversals can trigger early exits during minor pullbacks.
- Overtrading can occur if signals are ignored or entered too frequently.
- Scalping requires quick decision-making, which may not suit all traders.
- Trades may occasionally be stopped out during sudden market spikes or news events.
Case Study 1
On EURUSD M5 during the London session, the Ichimoku Cloud turned blue, indicating a bullish trend.
A blue arrow appeared from the Best Forex Scalping indicator after a small pullback.
A buy trade was entered and held while the cloud remained blue.
Later, when the cloud shifted to magenta, the trade was closed, securing a profitable intraday upward move.
Case Study 2
On GBPJPY M1 during the New York session, the Ichimoku Cloud was magenta, confirming a bearish trend.
A red arrow appeared from the Best Forex Scalping indicator, signaling a sell trade.
The trade was opened and maintained while the cloud stayed magenta.
When the cloud changed to blue and a blue arrow appeared, the trade was closed, locking in intraday profit.
Strategy Tips
- Trade only in the direction of the Ichimoku cloud to stay aligned with the main trend.
- Enter trades only when a matching arrow from the Best Forex Scalping indicator appears to filter weak setups.
- Focus on major currency pairs and gold during high volatility sessions for better scalping opportunities.
- Use recent swing highs and lows or cloud boundaries for placing stops safely.
- Close trades immediately if the cloud color or arrow reverses to lock in profits.
- Wait for minor pullbacks before entering trades to improve timing and reduce risk.
Download Now
Download the “dat-cloud-indicator.mq4” Metatrader 4 indicator
FAQ
What does a cloud color change indicate?
A cloud color change signals a potential shift in trend direction.
Blue clouds suggest bullish conditions, while magenta clouds suggest bearish conditions.
Can this indicator be used without classic Ichimoku settings?
Yes, the indicator simplifies traditional Ichimoku analysis by focusing on cloud direction and color, making it easier to trade without complex calculations.
Which timeframe works best with this indicator?
The indicator adapts well to all timeframes. Lower timeframes offer more frequent signals, while higher timeframes emphasize stronger trend moves.
Summary
The Ichimoku Cloud Signals indicator turns Ichimoku logic into an easy-to-read cloud-based trading tool.
By combining moving averages with cloud analysis, it highlights trend direction directly on the chart.
Its blue and magenta clouds help traders stay aligned with prevailing market conditions.
The visual signals make trend trading faster and more intuitive across different pairs and timeframes.
