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Ichimoku Cloud Baseline

The five-line Japanese system, reduced to its canonical entry.

F

The claim

Price above the cloud with the conversion line above the base line is the textbook Ichimoku long; the mirror image is the short. Beloved for looking sophisticated — the grade measures whether the sophistication pays.

Where it comes from

Goichi Hosoda published Ichimoku Kinkō Hyō in 1969 after decades of development. The 9/26/52 parameters are his originals, designed for six-day Japanese trading weeks.

The exact rule we graded

Long while price is above both cloud spans AND Tenkan(9) > Kijun(26); short on the full mirror image, on 1-hour candles, standard 9/26/52. Exits: 3-ATR trailing stop, 200-bar time exit.

The honest verdict

FAILS the gate
Net expectancy
+1.4bp
OOS trades
7,134
Win rate
36.8%
Reward:risk
1.74
  • OOS net expectancy > 0
  • Clears the cost hurdle
  • Robust, not lucky
  • Survivable drawdown
  • Not overfit
Per-asset OOS expectancy
DOGE
+21.0bp
AVAX
+8.3bp
ETH
+7.6bp
BNB
-1.6bp
BTC
-2.5bp
XRP
-2.8bp
LINK
-6.8bp
SOL
-12.3bp
Permanent verification record →Verified — run on our engine + data

Live forward test

since 2026-07-11 — win or lose

The backtest above is history. Since publication, this exact spec also runs in our nightly forward-test harness (the same one behind /forward-tests): only trades entered after publication count, open positions are never force-closed, and the record publishes either way.

No closed forward trades recorded yet — the record accrues nightly as trades complete their full exit windows.

Honest port notes

  • Cloud spans are compared the textbook way: against the span values plotted at the current bar, which were projected 26 bars earlier.
  • Hosoda's full system adds the Chikou span confirmation and cloud-twist timing; the price-vs-cloud + TK-cross baseline is the version every tutorial actually teaches, so that's what we graded.
The exact spec, as graded (JSON)
{
  "name": "Ichimoku Cloud Baseline",
  "universe": [
    "BTC/USDT:USDT",
    "ETH/USDT:USDT",
    "SOL/USDT:USDT",
    "BNB/USDT:USDT",
    "XRP/USDT:USDT",
    "DOGE/USDT:USDT",
    "LINK/USDT:USDT",
    "AVAX/USDT:USDT"
  ],
  "risk": {
    "risk_per_trade_pct": 1,
    "leverage_cap": 3,
    "max_daily_loss_pct": 5,
    "max_dd_halt_pct": 25
  },
  "sleeves": [
    {
      "name": "main",
      "timeframe": "1h",
      "entry": {
        "type": "rule",
        "logic": "all",
        "long": [
          {
            "indicator": "price",
            "period": 1,
            "op": ">",
            "vs_indicator": "ichimoku_a",
            "vs_period": 0
          },
          {
            "indicator": "price",
            "period": 1,
            "op": ">",
            "vs_indicator": "ichimoku_b",
            "vs_period": 0
          },
          {
            "indicator": "ichimoku_tenkan",
            "period": 9,
            "op": ">",
            "vs_indicator": "ichimoku_kijun",
            "vs_period": 26
          }
        ],
        "short": [
          {
            "indicator": "price",
            "period": 1,
            "op": "<",
            "vs_indicator": "ichimoku_a",
            "vs_period": 0
          },
          {
            "indicator": "price",
            "period": 1,
            "op": "<",
            "vs_indicator": "ichimoku_b",
            "vs_period": 0
          },
          {
            "indicator": "ichimoku_tenkan",
            "period": 9,
            "op": "<",
            "vs_indicator": "ichimoku_kijun",
            "vs_period": 26
          }
        ]
      },
      "exit": {
        "trail_atr": 3,
        "time_exit_bars": 200
      }
    }
  ]
}

Every strategy graded on identical terms: 1-hour candles, 8 liquid USDT perpetuals (BTC, ETH, SOL, BNB, XRP, DOGE, LINK, AVAX), ~6 years of data with a chronological train/test split, real cost hurdle, 1% risk-per-trade sizing, 3x leverage cap. All numbers are out-of-sample (test window only).

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A Grade is a historical, out-of-sample statistical measurement — not investment advice, a prediction, or a guarantee. Most strategies fail; a passing grade can stop working as markets change. Risk disclosure