- Strategy
- Buys when price closes above the Ichimoku cloud for the first time and the Chikou span is above the price of 26 bars earlier, and sells the mirror image. The stop-loss sits just beyond the Kijun-sen.
- Risk model
- 1% of balance per trade (configurable), stop-loss on every order, one position at a time
What it does
The Ichimoku Kumo Breakout EA looks for price closing out of the Ichimoku cloud (the Kumo), a common sign that a market has moved from balance into a trend. A breakout is only accepted when the lagging Chikou span confirms it.
The Kijun-sen, Ichimoku's base line, is used as the stop-loss, so each trade's risk is tied to a meaningful level on the chart. The defaults are chosen for EURUSD on H4, a timeframe where Ichimoku is widely used.
How it works
The EA calculates Ichimoku from price data on each new bar:
- Tenkan-sen = midpoint of the 9-bar high and low; Kijun-sen = midpoint of the 26-bar high and low.
- Senkou Span A = (Tenkan + Kijun) ÷ 2 and Senkou Span B = midpoint of the 52-bar range, both plotted 26 bars ahead. The cloud under the latest bar therefore uses values calculated 26 bars earlier.
- Breakout: the last closed bar closed above the cloud top while the previous bar closed at or below it (the mirror for sells).
- Chikou confirmation: the last close (the Chikou span) must be above the high of the bar 26 periods earlier for buys, or below that bar's low for sells.
- Stop-loss: Kijun-sen minus 20 points for buys, plus 20 points for sells. If the Kijun is on the wrong side of price or more than 3 x ATR away, the trade is skipped.
- Target: 2R by default. Exit: a close through the other side of the cloud closes the position.
How to use it
Kumo breakouts tend to matter most on H4 and D1, where the cloud reflects several weeks of price action. A thick cloud behind the breakout usually represents stronger support than a thin one. Read the support and resistance lesson for the broader idea behind treating the cloud as a zone.
On H4 bars the default trading window (01:00 to 23:00 server time) excludes only the bar around the daily rollover, when spreads are often wide.
Settings
| Input | Default | What it changes |
|---|---|---|
| Tenkan-sen period | 9 | Conversion line length. |
| Kijun-sen period | 26 | Base line length; also the cloud and Chikou displacement. |
| Senkou Span B period | 52 | Length of the slower cloud boundary. |
| Stop buffer (points) | 20 | Distance placed beyond the Kijun-sen. |
| Take-profit (R multiple) | 2.0 | Target as a multiple of the stop distance. |
| Maximum stop (x ATR) | 3.0 | Skips the trade if the Kijun-sen is too far away. |
| Use trailing stop | false | When on, the stop follows the Kijun-sen. |
| Exit on opposite break | true | Closes the position on a close through the far side of the cloud. |
| Risk per trade (% of balance) | 1.0 | Share of balance risked between entry and stop. |
| Fixed lots | 0 | Fixed volume instead of risk %; 0 = risk-based. |
| Maximum spread (points) | 20 | Skips signals when the spread is wider; 0 = off. |
| Trading start / end hour | 1 / 23 | Server-time window for new trades; equal values = 24 hours. |
| Move stop to break-even | true | Stop to entry + 20 points once profit reaches 1R. |
| Magic number | 2611005 | Identifies this EA's trades. |
Limitations
- Ichimoku uses long lookbacks, so breakouts are confirmed late and can come after a large move.
- Price often returns into a thin cloud, producing false breakouts.
- The Kijun-sen can be far from price after a fast move; such signals are skipped by the ATR cap.
- On lower timeframes the cloud is much less meaningful and trades become noisy.
Before you run it live
Test on a demo account and in the MetaTrader 5 Strategy Tester over several years first. No backtest results are published for this EA, and any test describes the past only.
- Match the spread limit and trading hours to your broker's spreads, stop level and session times, and include commission and swap in tests.
- Start with 1% risk or less and check the lot sizes in the Experts log; the Position Size Calculator is a useful cross-check.
- Use a different magic number on each chart, and keep the terminal (or a VPS) running so stops are managed.
Because H4 produces relatively few signals, use several years of history in the Strategy Tester before drawing any conclusion.