Ichimoku Cloud and EMA Filters for Breakout Trend Following

Summary

This strategy combines customized Ichimoku components with a long-term exponential moving average (EMA) to seek sustained upward trends. In its default mode, a long entry requires a bullish cloud, price above a recent high, the conversion line above the base line, and price above the EMA. It exits when the conversion line falls below the base line. An alternative mode uses cloud line crossovers with additional price and EMA conditions. State tracking is intended to prevent repeated signals while a prior condition remains active.

The document gives detailed rule descriptions and code, including nonstandard Ichimoku periods and a 171-period EMA, but provides no backtest settings or measured results. Its claims about signal quality are therefore not supported by performance evidence here. The described approach is trend-oriented and may lag or whipsaw in sideways markets; its custom parameters may not transfer across assets or market regimes. Position sizing and risk controls also need attention, as the text notes that the implementation’s default equity allocation may be aggressive.

Key ideas

• The default entry combines a bullish Ichimoku cloud, a price breakout, a bullish conversion-to-base relationship, and an EMA filter.
• The default exit occurs when the conversion line falls below the base line.
• An alternative mode enters and exits on cloud span crossovers with added price and EMA conditions.
• The document lists lag, choppy markets, parameter sensitivity, and position exposure as risks, but gives no measured performance evidence.

Tags

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