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Ichimoku Kumo Breakoutall four conditions

Evidence: WeakIntermediateTrend Following · Multi-indicator

The cloud is a forward-projected zone of consensus price. Inside it is equilibrium; a close outside it is a rejection of that equilibrium.

Four conditions are mandatory: a close outside the cloud, the Tenkan/Kijun cross, a clear Chikou span, and the future cloud aligned. Partial alignment is not a signal.

Category
Trend Following · Multi-indicator
Timeframe
D1 primary · H4 secondary
Suitable pairs
USDJPY · USDCAD · GBPJPY · AUDJPY · EURUSD · XAUUSD
Session
Signal at the D1 or H4 close · on yen crosses, watch the Tokyo session
Indicators / tools
The full Ichimoku Kinko Hyo set (9, 26, 52, 26) · ATR(14)

Valid setup

S05 · ICHIMOKU KUMO BREAKOUT — VALID SETUP (ALL FOUR CONDITIONS) USDCAD · D1 · Ichimoku (9, 26, 52, 26) · partial alignment is not a signal LONG 1.3168 1.3260 1.3352 1.3444 1.3536 1.3628 1.3719 cloud top = trigger ENTRY = next bar open SL = cloud base (Senkou B) − 0.5×ATR +2R reference 1R +2R 1 2 3 4 5 6 ① Price inside / under the cloud = equilibrium — no trade ② Cloud ahead is THICK → the prior consensus is real ③ Tenkan (blue) crosses above Kijun (pink) ④ Close ABOVE the cloud — a wick through is not a break ⑤ Chikou span clear of price 26 bars back ⑥ Trail on Kijun; exit on a close below it 1.3673 1.3402 1.3391 1.3266 Kumo (Senkou A / B) Chikou (close −26) Kijun 26 Tenkan 9 kumo break

Exact rules

Entry

  • Price closes entirely above the cloud for a long, or entirely below it for a short — confirmed at the bar close.
  • Tenkan(9) above Kijun(26) for a long, and the reverse for a short.
  • The Chikou span — the close plotted 26 bars back — clear of the price action there, with no overhead obstruction.
  • The future cloud, Senkou A against Senkou B, aligned with the trade's direction.
  • Cloud thickness greater than 0.5 × ATR(14) at the breakout bar.
  • All five conditions are mandatory. Enter at the next bar's open.

Stop loss

  • Long: 0.5 × ATR(14) below the lower boundary of the cloud, Senkou B.
  • A tighter alternative: one ATR below the Kijun-sen.
  • A thin cloud means a tight stop and a thick one a wide stop. Keep the risk constant by adjusting position size — not by keeping the stop distance constant.

Take profit / exit

  • Primary: trail the Kijun-sen. A close below it is the exit.
  • Structural target: the previous major swing high or low.
  • An optional partial at 3R. Note that a thick cloud makes the stop wide, so the R-multiples look small — that is normal.

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Trading carries risk and most retail accounts lose money. Nothing on this page is financial advice or a recommendation to trade. The chart is an illustration of the rules on constructed candles — it is not a record of a trade and not a backtest.