The Ichimoku cloud is the busiest indicator on any chart: five lines, and a shaded cloud drawn 26 days into the future. Goichi Hosoda published it in 1969, and the simplest way to use it is the one its own definition suggests: the trend is up when the price is above the cloud.
I tested exactly that on EUR/USD since 2004: buy the first close above the cloud, sell the first close back inside or below it. 177 closed trades.
The rules
- Buy when EUR/USD closes above the Ichimoku cloud: above both Leading Span A and Leading Span B.
- Sell when it closes back inside or below the cloud (the trend is no longer “up” by Ichimoku’s own definition).
- Goichi Hosoda’s default 9/26/52 settings on daily bars; the cloud is plotted 26 days ahead, so each day’s cloud is built from data 26 days earlier. Long only; in cash between trades.
Market: Euro in US dollars (EURUSD=X).
Data: Yahoo’s daily highs and lows for EUR/USD contain errors (the closes are fine), so before the cloud is calculated every high and low is widened to include that day’s open and close, and the impossible low of 27 January 2012 (0.7606, with a close of 1.3093) is replaced by the lower of that day’s open and close.
The result
| Ichimoku cloud | Buy-and-hold | |
|---|---|---|
| Annual return | −0.41% | −0.44% |
| Total return | −9% | −9% |
| Max drawdown | −28.1% | −40.0% |
| Worst fall, from – to | Nov 2010 – Apr 2020 | Apr 2008 – Sep 2022 |
| Time in the market | 43% | 100% |
| Trades | Value |
|---|---|
| Closed trades | 177 |
| Winners | 56 (31.6%) |
| Average winner | +1.79% |
| Average loser | −0.88% |
| Win/loss ratio | 2.04 |
| Profit factor | 0.95 |
| Best / worst trade | +11.4% / −6.2% |
| Average holding time | 14 sessions |
My read
It is a trend-following rule, and it trades like one. Only 32% of the trades won, but the average winner (1.8%) was about 2 times the average loser (−0.9%). Half the trades were over within 4 trading days: the price poked above the cloud and fell back in. The best one, bought in Apr 2009, stayed above the cloud for 159 trading days and made 11.4%. The longest losing run was 16 trades in a row.
Over the whole period it lost 0.41% a year. Holding the euro against the dollar lost 0.44% a year, so the rule lost a little less, and its worst fall was 28% against 40%. It was in the market 43% of the time. All of this is before costs and with no interest on the cash.
My read: the cloud tells you what the trend has been, and on EUR/USD that was not enough. The euro ended these years lower than it started, with long swings both ways, so a close above the cloud was as often a false start as a new trend. In a market that trends hard, like Bitcoin in the Lab’s 20-day breakout test, the same kind of rule paid. I would use the cloud as a filter, long only above it, and take the entries from something faster.
Every trade
177 closed trades, newest first
| Bought | Price | Sold | Price | Result |
|---|---|---|---|---|
| 2026-08-18 | 1.1583 | 2026-09-18 | 1.1476 | −0.9% |
| 2026-05-08 | 1.1732 | 2026-05-15 | 1.1662 | −0.6% |
| 2026-05-04 | 1.1727 | 2026-05-06 | 1.1716 | −0.1% |
| 2026-04-29 | 1.1718 | 2026-04-30 | 1.1685 | −0.3% |
| 2026-04-15 | 1.1799 | 2026-04-24 | 1.1684 | −1.0% |
| 2026-01-26 | 1.1858 | 2026-03-04 | 1.1612 | −2.1% |
| 2026-01-22 | 1.1673 | 2026-01-23 | 1.1755 | +0.7% |
| 2026-01-14 | 1.1643 | 2026-01-19 | 1.1625 | −0.2% |
| 2025-12-12 | 1.1739 | 2026-01-13 | 1.1667 | −0.6% |
| 2025-10-20 | 1.1657 | 2025-10-21 | 1.1644 | −0.1% |
| 2025-09-05 | 1.1657 | 2025-10-13 | 1.1602 | −0.5% |
| 2025-09-01 | 1.1692 | 2025-09-04 | 1.1660 | −0.3% |
| 2025-08-26 | 1.1618 | 2025-08-27 | 1.1639 | +0.2% |
| 2025-08-22 | 1.1613 | 2025-08-25 | 1.1710 | +0.8% |
| 2025-08-19 | 1.1668 | 2025-08-20 | 1.1643 | −0.2% |
| 2025-08-14 | 1.1713 | 2025-08-18 | 1.1707 | −0.1% |
| 2025-08-08 | 1.1677 | 2025-08-13 | 1.1677 | +0.0% |
| 2025-08-05 | 1.1584 | 2025-08-07 | 1.1663 | +0.7% |
| 2025-06-02 | 1.1353 | 2025-08-01 | 1.1424 | +0.6% |
| 2025-03-04 | 1.0485 | 2025-05-30 | 1.1378 | +8.5% |
| 2025-02-27 | 1.0489 | 2025-03-03 | 1.0414 | −0.7% |
| 2024-07-12 | 1.0873 | 2024-10-07 | 1.0975 | +0.9% |
| 2024-07-08 | 1.0826 | 2024-07-11 | 1.0833 | +0.1% |
| 2024-06-14 | 1.0739 | 2024-06-17 | 1.0702 | −0.3% |
| 2024-05-17 | 1.0868 | 2024-06-11 | 1.0764 | −1.0% |
| 2024-03-22 | 1.0862 | 2024-03-25 | 1.0808 | −0.5% |
| 2024-03-15 | 1.0883 | 2024-03-18 | 1.0883 | −0.0% |
| 2024-03-11 | 1.0943 | 2024-03-13 | 1.0928 | −0.1% |
| 2024-01-26 | 1.0847 | 2024-01-29 | 1.0844 | −0.0% |
| 2023-11-16 | 1.0855 | 2024-01-25 | 1.0882 | +0.3% |
| 2023-07-10 | 1.0970 | 2023-08-18 | 1.0875 | −0.9% |
| 2023-06-23 | 1.0959 | 2023-07-07 | 1.0891 | −0.6% |
| 2023-03-24 | 1.0835 | 2023-05-22 | 1.0823 | −0.1% |
| 2022-11-09 | 1.0081 | 2023-02-23 | 1.0606 | +5.2% |
| 2022-02-08 | 1.1443 | 2022-02-10 | 1.1422 | −0.2% |
| 2022-01-17 | 1.1411 | 2022-01-18 | 1.1411 | −0.0% |
| 2021-04-28 | 1.2090 | 2021-06-18 | 1.1913 | −1.5% |
| 2021-02-01 | 1.2124 | 2021-02-03 | 1.2039 | −0.7% |
| 2020-11-17 | 1.1859 | 2021-01-29 | 1.2120 | +2.2% |
| 2020-11-09 | 1.1893 | 2020-11-13 | 1.1803 | −0.8% |
| 2020-10-23 | 1.1815 | 2020-10-26 | 1.1848 | +0.3% |
| 2020-06-01 | 1.1119 | 2020-09-24 | 1.1659 | +4.9% |
| 2020-03-30 | 1.1139 | 2020-04-03 | 1.0847 | −2.6% |
| 2020-03-04 | 1.1181 | 2020-03-19 | 1.0962 | −2.0% |
| 2019-12-12 | 1.1136 | 2020-01-21 | 1.1097 | −0.3% |
| 2019-12-04 | 1.1085 | 2019-12-10 | 1.1065 | −0.2% |
| 2019-11-20 | 1.1080 | 2019-11-26 | 1.1014 | −0.6% |
| 2019-10-31 | 1.1154 | 2019-11-11 | 1.1022 | −1.2% |
| 2019-10-21 | 1.1156 | 2019-10-28 | 1.1084 | −0.6% |
| 2019-07-22 | 1.1218 | 2019-07-23 | 1.1206 | −0.1% |
| 2019-07-12 | 1.1252 | 2019-07-18 | 1.1230 | −0.2% |
| 2019-06-24 | 1.1385 | 2019-07-09 | 1.1216 | −1.5% |
| 2019-06-11 | 1.1318 | 2019-06-17 | 1.1217 | −0.9% |
| 2019-03-22 | 1.1375 | 2019-03-25 | 1.1296 | −0.7% |
| 2019-01-30 | 1.1435 | 2019-02-07 | 1.1366 | −0.6% |
| 2019-01-16 | 1.1417 | 2019-01-17 | 1.1398 | −0.2% |
| 2019-01-11 | 1.1510 | 2019-01-15 | 1.1473 | −0.3% |
| 2018-10-17 | 1.1575 | 2018-10-19 | 1.1460 | −1.0% |
| 2018-10-15 | 1.1551 | 2018-10-16 | 1.1583 | +0.3% |
| 2018-09-17 | 1.1629 | 2018-10-05 | 1.1518 | −1.0% |
| 2018-04-17 | 1.2385 | 2018-04-23 | 1.2273 | −0.9% |
| 2018-04-11 | 1.2363 | 2018-04-16 | 1.2333 | −0.2% |
| 2018-03-23 | 1.2325 | 2018-03-30 | 1.2303 | −0.2% |
| 2018-03-21 | 1.2252 | 2018-03-22 | 1.2348 | +0.8% |
| 2017-12-21 | 1.1878 | 2018-03-20 | 1.2337 | +3.9% |
| 2017-12-15 | 1.1775 | 2017-12-18 | 1.1744 | −0.3% |
| 2017-12-06 | 1.1833 | 2017-12-07 | 1.1804 | −0.2% |
| 2017-12-04 | 1.1860 | 2017-12-05 | 1.1868 | +0.1% |
| 2017-11-28 | 1.1905 | 2017-11-30 | 1.1852 | −0.4% |
| 2017-04-19 | 1.0729 | 2017-10-04 | 1.1748 | +9.5% |
| 2017-04-14 | 1.0616 | 2017-04-18 | 1.0645 | +0.3% |
| 2017-03-17 | 1.0775 | 2017-04-11 | 1.0598 | −1.6% |
| 2017-03-14 | 1.0651 | 2017-03-15 | 1.0612 | −0.4% |
| 2016-09-23 | 1.1210 | 2016-10-10 | 1.1197 | −0.1% |
| 2016-09-21 | 1.1154 | 2016-09-22 | 1.1193 | +0.4% |
| 2016-09-08 | 1.1241 | 2016-09-20 | 1.1181 | −0.5% |
| 2016-09-05 | 1.1162 | 2016-09-06 | 1.1153 | −0.1% |
| 2016-08-18 | 1.1299 | 2016-09-01 | 1.1161 | −1.2% |
| 2016-06-07 | 1.1364 | 2016-06-09 | 1.1407 | +0.4% |
| 2016-03-07 | 1.0994 | 2016-05-20 | 1.1206 | +1.9% |
| 2016-02-05 | 1.1200 | 2016-03-04 | 1.0949 | −2.2% |
| 2015-10-13 | 1.1356 | 2015-10-26 | 1.1020 | −3.0% |
| 2015-08-24 | 1.1377 | 2015-09-30 | 1.1256 | −1.1% |
| 2015-08-14 | 1.1161 | 2015-08-18 | 1.1078 | −0.7% |
| 2015-07-14 | 1.0990 | 2015-07-15 | 1.1008 | +0.2% |
| 2015-07-01 | 1.1135 | 2015-07-03 | 1.1087 | −0.4% |
| 2015-06-04 | 1.1258 | 2015-06-30 | 1.1223 | −0.3% |
| 2015-05-04 | 1.1186 | 2015-05-27 | 1.0889 | −2.7% |
| 2014-05-02 | 1.3871 | 2014-05-13 | 1.3757 | −0.8% |
| 2014-04-28 | 1.3841 | 2014-05-01 | 1.3869 | +0.2% |
| 2014-04-24 | 1.3819 | 2014-04-25 | 1.3832 | +0.1% |
| 2014-02-19 | 1.3762 | 2014-04-23 | 1.3810 | +0.3% |
| 2014-01-31 | 1.3559 | 2014-02-03 | 1.3488 | −0.5% |
| 2014-01-27 | 1.3688 | 2014-01-30 | 1.3659 | −0.2% |
| 2014-01-20 | 1.3528 | 2014-01-21 | 1.3549 | +0.2% |
| 2013-12-10 | 1.3740 | 2014-01-17 | 1.3618 | −0.9% |
| 2013-11-26 | 1.3528 | 2013-11-27 | 1.3568 | +0.3% |
| 2013-11-19 | 1.3504 | 2013-11-22 | 1.3472 | −0.2% |
| 2013-11-15 | 1.3449 | 2013-11-18 | 1.3484 | +0.3% |
| 2013-09-10 | 1.3258 | 2013-11-11 | 1.3348 | +0.7% |
| 2013-07-29 | 1.3287 | 2013-09-09 | 1.3174 | −0.9% |
| 2013-07-23 | 1.3190 | 2013-07-26 | 1.3274 | +0.6% |
| 2013-07-12 | 1.3098 | 2013-07-22 | 1.3160 | +0.5% |
| 2013-07-05 | 1.2908 | 2013-07-08 | 1.2829 | −0.6% |
| 2013-06-07 | 1.3246 | 2013-07-04 | 1.3011 | −1.8% |
| 2012-12-13 | 1.3067 | 2013-02-25 | 1.3196 | +1.0% |
| 2012-12-05 | 1.3099 | 2012-12-10 | 1.2906 | −1.5% |
| 2012-11-28 | 1.2938 | 2012-11-29 | 1.2953 | +0.1% |
| 2012-08-30 | 1.2531 | 2012-11-06 | 1.2802 | +2.2% |
| 2012-04-26 | 1.3233 | 2012-05-04 | 1.3156 | −0.6% |
| 2012-04-24 | 1.3152 | 2012-04-25 | 1.3198 | +0.3% |
| 2012-03-20 | 1.3229 | 2012-04-06 | 1.3065 | −1.2% |
| 2012-02-23 | 1.3256 | 2012-03-15 | 1.3023 | −1.8% |
| 2011-10-31 | 1.4140 | 2011-11-02 | 1.3656 | −3.4% |
| 2011-08-24 | 1.4437 | 2011-09-05 | 1.4158 | −1.9% |
| 2011-08-18 | 1.4429 | 2011-08-22 | 1.4369 | −0.4% |
| 2011-07-28 | 1.4373 | 2011-07-29 | 1.4332 | −0.3% |
| 2011-07-01 | 1.4497 | 2011-07-07 | 1.4332 | −1.1% |
| 2011-06-07 | 1.4583 | 2011-06-10 | 1.4516 | −0.5% |
| 2011-06-02 | 1.4345 | 2011-06-03 | 1.4486 | +1.0% |
| 2011-05-19 | 1.4255 | 2011-05-24 | 1.4037 | −1.5% |
| 2011-02-21 | 1.3713 | 2011-05-17 | 1.4158 | +3.2% |
| 2011-02-11 | 1.3602 | 2011-02-14 | 1.3510 | −0.7% |
| 2011-02-02 | 1.3830 | 2011-02-07 | 1.3575 | −1.8% |
| 2011-01-26 | 1.3686 | 2011-02-01 | 1.3714 | +0.2% |
| 2010-11-22 | 1.3744 | 2010-11-24 | 1.3386 | −2.6% |
| 2010-09-17 | 1.3076 | 2010-11-18 | 1.3554 | +3.7% |
| 2010-09-03 | 1.2826 | 2010-09-09 | 1.2732 | −0.7% |
| 2010-08-30 | 1.2754 | 2010-09-01 | 1.2687 | −0.5% |
| 2010-07-23 | 1.2913 | 2010-08-25 | 1.2633 | −2.2% |
| 2010-07-16 | 1.2932 | 2010-07-22 | 1.2903 | −0.2% |
| 2009-04-30 | 1.3235 | 2009-12-09 | 1.4738 | +11.4% |
| 2009-04-24 | 1.3258 | 2009-04-28 | 1.3131 | −1.0% |
| 2009-01-09 | 1.3455 | 2009-01-12 | 1.3360 | −0.7% |
| 2008-12-17 | 1.4408 | 2009-01-06 | 1.3510 | −6.2% |
| 2008-12-09 | 1.2926 | 2008-12-10 | 1.3014 | +0.7% |
| 2008-07-10 | 1.5785 | 2008-07-30 | 1.5574 | −1.3% |
| 2008-06-26 | 1.5753 | 2008-07-09 | 1.5736 | −0.1% |
| 2008-06-23 | 1.5523 | 2008-06-24 | 1.5570 | +0.3% |
| 2008-06-09 | 1.5644 | 2008-06-10 | 1.5464 | −1.1% |
| 2008-05-21 | 1.5788 | 2008-05-28 | 1.5656 | −0.8% |
| 2008-05-12 | 1.5540 | 2008-05-14 | 1.5469 | −0.5% |
| 2008-02-27 | 1.5118 | 2008-05-08 | 1.5464 | +2.3% |
| 2008-02-11 | 1.4502 | 2008-02-12 | 1.4582 | +0.6% |
| 2008-01-23 | 1.4632 | 2008-02-08 | 1.5571 | +6.4% |
| 2008-01-11 | 1.4790 | 2008-01-17 | 1.4640 | −1.0% |
| 2007-12-28 | 1.4718 | 2008-01-10 | 1.4801 | +0.6% |
| 2007-09-07 | 1.3775 | 2007-12-17 | 1.4413 | +4.6% |
| 2007-08-27 | 1.3638 | 2007-08-28 | 1.3599 | −0.3% |
| 2007-07-02 | 1.3635 | 2007-08-16 | 1.3425 | −1.5% |
| 2007-03-13 | 1.3190 | 2007-05-25 | 1.3450 | +2.0% |
| 2007-03-07 | 1.3179 | 2007-03-12 | 1.3188 | +0.1% |
| 2007-02-19 | 1.3152 | 2007-03-06 | 1.3138 | −0.1% |
| 2006-11-08 | 1.2760 | 2007-01-08 | 1.3040 | +2.2% |
| 2006-11-01 | 1.2754 | 2006-11-06 | 1.2726 | −0.2% |
| 2006-09-22 | 1.2800 | 2006-09-26 | 1.2687 | −0.9% |
| 2006-07-28 | 1.2751 | 2006-09-11 | 1.2710 | −0.3% |
| 2006-07-07 | 1.2824 | 2006-07-11 | 1.2767 | −0.4% |
| 2006-07-03 | 1.2801 | 2006-07-06 | 1.2776 | −0.2% |
| 2006-06-22 | 1.2585 | 2006-06-23 | 1.2524 | −0.5% |
| 2006-03-31 | 1.2115 | 2006-06-20 | 1.2589 | +3.9% |
| 2006-03-27 | 1.2011 | 2006-03-28 | 1.2011 | +0.0% |
| 2006-03-17 | 1.2192 | 2006-03-24 | 1.2035 | −1.3% |
| 2006-01-04 | 1.2112 | 2006-02-13 | 1.1912 | −1.7% |
| 2005-09-01 | 1.2490 | 2005-09-19 | 1.2139 | −2.8% |
| 2005-08-12 | 1.2445 | 2005-08-16 | 1.2350 | −0.8% |
| 2005-03-09 | 1.3377 | 2005-03-22 | 1.3077 | −2.2% |
| 2005-02-23 | 1.3203 | 2005-02-24 | 1.3183 | −0.2% |
| 2005-01-13 | 1.3211 | 2005-01-17 | 1.3051 | −1.2% |
| 2004-09-22 | 1.2267 | 2005-01-10 | 1.3110 | +6.9% |
| 2004-09-10 | 1.2273 | 2004-09-16 | 1.2190 | −0.7% |
| 2004-08-09 | 1.2273 | 2004-08-24 | 1.2082 | −1.6% |
| 2004-07-27 | 1.2064 | 2004-07-28 | 1.2044 | −0.2% |
| 2004-06-25 | 1.2203 | 2004-07-26 | 1.2139 | −0.5% |
| 2004-06-21 | 1.2126 | 2004-06-24 | 1.2174 | +0.4% |
| 2004-06-16 | 1.2007 | 2004-06-17 | 1.2034 | +0.2% |
| 2004-06-08 | 1.2261 | 2004-06-09 | 1.2043 | −1.8% |
How it was tested
- Signals are read on the daily close; each trade happens at the next day’s close. No look-ahead.
- Long only, fully in or fully out. No commissions, slippage, interest or dividends.
- The test starts on the first day every indicator has a value (Mar 18, 2004); buy-and-hold covers the same days.
- Prices: Yahoo Finance daily data (EURUSD=X), snapshot
eurusd-2026-10-21.csv. Checked by a second, independent program before publishing.
Not financial advice. This is educational content, shared for information and entertainment only, and it is not a recommendation to buy or sell any asset. Backtests and past results do not guarantee future results, and the numbers or charts here may contain mistakes. Trading carries risk, including losing all the money you put in. Do your own research before you make any decision.