Ichimoku Gap-Cycle Synchronicity

Family: hybrid · Regime: trending · Complexity: high · Asset classes: Equities, Forex (Major Pairs), Indices · Timeframes: H1, D1

Thesis

Significant price gaps within an established Ichimoku trend signal a surge in institutional conviction. However, these moves often experience short-term 'cycle exhaustion.' By entering when the Detrended Price Oscillator (DPO) aligns with the gap direction—while ensuring price volatility is not chaotic (via RAE)—we capture the 'meat' of the trend extension. The edge relies on the behavioral tendency of price to follow institutional gaps after a brief rhythmic pause.

Components

Ichimoku Kinko Hyo (regime) — Establishes the macro-trend regime; entries are only permitted in the direction of the Kumo cloud and Tenkan/Kijun alignment.
MindTheGap (direction) — Identifies institutional 'impulse' signals. A gap in the direction of the trend validates the continuation of momentum.
Detrended Price Oscillator (DPO) (entry) — Isolates the short-term price cycle. Entry is triggered when the cycle turns back in favor of the trend after a minor pull-back.
Relative Strength Index (with timeframe) (exit) — Signals the exhaustion of the impulsive move to lock in profits before the next cycle contraction.
Chandelier Exit (risk) — Provides a volatility-adjusted trailing stop and initial risk anchor based on ATR.
Relative Absolute Error (RAE) (volatility_filter) — Filters out chaotic price action where the error relative to the mean (SMA) is too high, ensuring 'cleaner' trend moves.

Known failure conditions

The asset enters a prolonged sideways 'squeeze' where Senkou Spans flatten and converge.
Gaps are consistently filled within 1-2 candles, indicating a lack of follow-through.
RAE remains consistently above 1.0, suggesting price action is more random than the baseline model.

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