Ichimoku Trend Following
Rides sustained trends in Bitcoin and Ether, but only once several independent signals agree that the trend is real.
- Markets
- Bitcoin and Ether, futures
- Chart
- 4-hour candles
- Direction
- Long only
- Leverage
- 2x, isolated margin
- Positions
- One per asset
- Trades per year
- About 1 to 5 per coin
- Live since
- 1 August 2025
- Choppy market: price jumps around the cloud and some checks fail, so the strategy stays out.
- Entry: all six checks agree, including the Bitcoin regime.
- Protective stop: set below the entry, based on recent volatility.
- Exit: momentum fades and the position closes, well before the trend fully reverses.
- Bitcoin regime: grey while off, gold while on. It only gates new entries.
The idea
Crypto markets trend. When Bitcoin or Ether start a sustained move, it often runs for weeks or months, longer than most people expect. A trend-following strategy does not try to predict these moves. It waits until a trend is clearly under way, joins it, and stays in until the trend loses its drive.
The hard part is telling a real trend from noise. On a 4-hour chart, price keeps producing short bursts that look like the start of something and then fade. This strategy deals with that by asking for several different views of the trend to agree before it buys, and by checking the state of the whole market, not just the coin it trades.
When it buys
A trade opens only when all six checks pass at the same time:
Momentum
Short-term price momentum sits above its long-term balance point.
Cloud
The Ichimoku cloud under the current price points upward.
Long-term average
Price trades above a long-term moving average.
Ichimoku picture
A score that combines seven classic Ichimoku signals is positive overall.
Trend direction
A smoothed fast trend line runs above a slower one.
Bitcoin regime
Bitcoin itself is in an uptrend on the daily chart: it has broken out to a multi-week high above its long-term average, and no breakdown has ended that phase since.
All six agree: the trade opens.
After a trade closes, the strategy waits a day before it can enter again, so it does not jump straight back into a trend that has just turned.
When it sells
Momentum fades
The position closes when short-term momentum falls back below its long-term balance point. The trend has lost its drive, even if price has not fallen much yet.
Protective stop
At entry, a stop is set below the entry price, at a distance based on recent volatility. It limits the loss when a breakout fails straight away.
The Bitcoin regime only decides whether new trades may open. Once a trade is running, the exit rules alone decide when it ends.
Risk
- Moderate leverage of 2x on futures. Every position uses isolated margin, so a single trade can never draw on the rest of the account. The protective stop is there to cut a failed trade early.
- Capital is split evenly between Bitcoin and Ether, with at most one position in each.
- Long only. In falling markets the strategy is simply out of the market.
Where it does well, and where it struggles
Does well in
- Long, persistent uptrends, such as bull markets in Bitcoin and Ether.
- Phases where Bitcoin leads the market higher and the rest follows.
Struggles in
- Sideways, choppy markets, where trends start and fail repeatedly. The checks filter out many false starts, but not all of them.
- Sharp reversals. The strategy buys after a trend is visible and sells after it weakens, so it never catches the exact bottom or top and gives back part of each move.
- Bear markets. It stays out, which protects capital but earns nothing.
Backtest
How the strategy would have traded since 2018, with the same rules, limits and leverage as live.
Jan 2018 to Oct 2026. Bitcoin and Ether, one position each, 2x leverage. Starting balance $10,000, profits reinvested, fees included.
- Average return per year
- +105%
- Worst drawdown
- −28% −27% on closed trades
- Trades
- 76 About 10 days each, typically
- Winning trades
- 41% Profit factor 3.0
Including open trades at their lowest pointClosed trades only
| Year | Return | Worst drawdown |
|---|---|---|
| 2018 | +14% | −4% |
| 2019 | +129% | −14% |
| 2020 | +65% | −27% |
| 2021 | +1,855% | −16% |
| 2022 | −14% | −14% |
| 2023 | +3% | −20% |
| 2024 | +278% | −18% |
| 2025 | +91% | −15% |
| 2026 to Oct | 0% | −28% |
Hypothetical results from a simulation on historical data, not live trading. Live results differ, and past performance is no guarantee of future results. How the backtests were made