Scaling Ichimoku Signals by Price Position Relative to the Cloud

Summary

This post outlines a long-term Bitcoin strategy based on the standard Ichimoku cloud. It scales position changes according to where price sits relative to the cloud when a crossover occurs: bullish crossovers lead to smaller, medium, or full purchases below, inside, or above the cloud; bearish crossovers trigger corresponding sales. The author says signals are infrequent, arriving roughly every couple of weeks to a month, and reports manually following the approach during a long period without a sell signal.

The post raises a question about why TradingView reports a Sharpe ratio of 0.118 despite the author's profitable live experience. It also cites a very large historical backtest return, while acknowledging that the test omitted fees and slippage. These are personal observations rather than a controlled evaluation: the post supplies no risk-adjusted comparison, detailed execution assumptions, or evidence that the result generalizes. Infrequent signals and prolonged holding periods may also make performance estimates sensitive to the selected market history.

Key ideas

• The strategy uses Ichimoku crossover signals to adjust Bitcoin exposure over the long term.
• Bullish and bearish crossover actions are scaled by whether price is below, within, or above the cloud.
• The author reports infrequent signals and a prolonged holding period without a sell signal.
• The reported backtest omitted transaction costs and slippage, limiting its reliability.
• The post contrasts a low reported Sharpe ratio with personal live-trading experience but does not resolve the discrepancy.

Tags

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