Dow Jones Kumo Breakout with ATR Profit Targets

Summary

This long-only Dow Jones strategy on an hourly timeframe combines a close crossing above a 600-period moving average with a close above the Ichimoku cloud. It opens a two-contract position only when both entry conditions hold and no position is already open. The stated goal is to capture substantial bullish moves while filtering out weaker breakouts through the cloud condition.

At entry, the strategy fixes the 14-period ATR and uses it to set two profit targets: one contract exits at eight ATR and the remaining contract at twenty ATR. Any remaining position also exits at market if the close is below both the moving average and the cloud’s lower boundary. There is no fixed stop-loss. The document reports a backtest using an average spread of four points, but provides no performance results and excludes overnight financing costs, which may matter for CFDs. The rules and backtest assumptions do not establish future profitability.

Key ideas

• A long entry requires a close crossing above the 600-period moving average and finishing above the Ichimoku cloud.
• The strategy records ATR at entry and keeps that value fixed for its profit targets.
• It exits one contract at eight ATR and the remainder at twenty ATR.
• The remaining position closes if price is below both the moving average and the cloud bottom.
• The strategy has no fixed stop-loss and excludes overnight financing costs.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.