Green Dragon is a strategy using the Ichimoku Kinko Hyo system for placing trades. The most important thing to remember when placing orders in Green Dragon is to use the Chinkou Span line to cross prices. This is a traditional Ichimoku strategy, but it isn't as well-known as other strategies. Chinkou Span usually refers to the market momentum indicator, it is employed to confirm that the outcome of the investigation of price movement by the trading system. This description is somewhat ambiguous and unhelpful. Chinkou Span is used as an indicator to show the moment when price crossed an area of support or resistance. When it is observed that the Chinkou line is above its historical price, then someplace since then the current price has crossed support or resistance and the location of that line is usually evident. This feature of the Chinkou Span is used in the Green Dragon strategy, as the crosses are usually observed when a consolidation period breaks.
Strategies to use price/chinkou crossovers, with confirmation by other signals to place trades
For long positions:
  1. Chinkou Span must cross the price line in the direction of the trade and is the main entry signal
  2. The Chinkou line must be above Kumo
  3. The price line should be higher than Kumo
  4. Kumo must be larger than the size specified in settings (KumoJoy parameter)
If the three signals are all present at the time that Chinkou is crossing the price line then a trade can be opened.
The trade is exited at the point that the Chinkou crosses back over the price line, or the candle has closed below the Tenkan Sen line.
For short positions, it is the reverse. Once an order is opened, a message will be sent to an email address specified in the MetaTrader settings.
A simple 12-period ATR formula is used to determine the volume of positions. The formula is: Account funds / (ATRMultiplier*12-period ATR), then converted to lots by multiplying by the tick size of the currency pair. The result is converted into an amount, e.g: 50,000 to 0.50
Stop Loss can be calculated as a percentage of the account balance divided by the resulting lot size. So, if you have a stop-loss value of 0.02 the chance of losing would be 2% of the account balance divided by the number of lot utilized.
The most effective part to this method is using Kumo size to filter trades. The Ichimoku strategy is built on following trends which means it's not the most effective strategy when the market is in a sluggish or no-trend state. Fortunately, Kumo responds to these markets, and you can utilize Kumo to sort trades. If the market is going linearly, whether it is sideways or upright, Kumo will filter. So, by setting a size limit you can effectively block out unneeded markets. This is the case for markets that are volatile as well as news spikes. With Kumo there's no need to turn off trading during news cycles, just increase the Kumo size threshold (parameter KumoJoy)
KumoJoy can also be used as a straightforward method to tune the EA in real time. If you are seeing the market beginning to consolidate, you can increase the KumoJoy value to limit the parameters. Similarly, if important news is anticipated, you can raise the KumoJoy value to a safer level. If the market is anticipating an upcoming trend, you could lower the KumoJoy value (in certain instances, down to 0) to catch more pips. You can choose to optimize all parameters, and it will not take long, whether you choose to optimize quarterly or monthly.

Input parameters​

  • ATR Multiplier is the multiplier of the raw ATR value to calculate the appropriate number. The greater the value, the smaller the average lot size.
  • Stoploss Risk - The risk expressed as a percentage of the account balance, that is used in calculating the stop loss. It is written in decimal form. For example, 0.02 = 2%
  • TenkanSen - parameter to set the value of Ichimoku default value 9
  • KijunSen - parameter to set the value of Ichimoku the default value is 26.
  • SenkouSpan A parameter to set Ichimoku the default value is 52.
  • KumoJoy - KumoJoy - Kumo threshold size that is used to filter trades specified in pips
--that's it!
"May the Green Dragon bring you lots of pips!"
Scalping Forex Ea
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