Ichimoku-ALMA Cyclical Momentum Strategy
Family: hybrid · Regime: trending · Complexity: medium · Asset classes: FX, Equities, Crypto · Timeframes: H1, H4
Thesis
Trends are most persistent when structural breakouts (Ichimoku) are confirmed by low-lag directional filters (ALMA) and normalized momentum (AGC). By entering only when MACD signals an acceleration within high-liquidity sessions, the strategy exploits 'momentum inertia' while using RSI and MACD reversals to exit before the inevitable mean reversion. The edge lies in the combination of cycle normalization with classic trend structure.
Components
- Ichimoku Kinko Hyo (regime) — Establishes the macro trend 'Cloud' (Kumo) to ensure trades are only taken in the direction of structural support/resistance.
- Arnaud Legoux Moving Average (ALMA) (direction) — Provides a low-lag, smooth trend direction to filter out the noise inherent in Ichimoku's midpoint calculations.
- MACD (entry) — Captures the specific momentum burst required to trigger an entry, ensuring the trend is accelerating.
- Relative Strength Index (Standard) (exit) — Used as a mean-reversion exit trigger when momentum becomes exhausted in the overbought/oversold zones.
- Gain Loss Info (Visual Overlays) (risk) — Provides the volatility-based threshold for stop-loss placement and position sizing based on recent candle ranges.
- Ehlers Automatic Gain Control (AGC) (confirmation) — Normalizes momentum signals to ensure the entry has sufficient amplitude relative to recent market cycles.
- Calendar Session Utility (volatility_filter) — Restricts trading to high-liquidity hours where trend persistence is statistically more likely.
Known failure conditions
- Price remains pinned inside the Ichimoku Kumo (Cloud) for more than 50 bars.
- ALMA slope remains flat (zero-delta) across 10 consecutive bars.
- Realized volatility consistently exceeds the Gain Loss Info 'PercentageLimit' resulting in immediate stop-outs.
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