Ichimoku Liquidity Breakout Filter

Family: trend_following · Regime: trending · Complexity: medium · Asset classes: Forex, Equities, Crypto · Timeframes: H1, H4, D1

Thesis

The hypothesis is that financial markets exhibit trend inertia once they break out of equilibrium (Ichimoku Cloud) in alignment with a primary trend (SMA) and sufficient momentum (DMI). By using structural liquidity levels (20-period HH/LL) for stop placement, we capture the meat of the trend while exiting when momentum shows a mean-reversion signature (CCI exhaustion).

Components

• Supported ta.dmi na lengths (Test Script) (regime) — Establishes a trend regime filter; requires ADX > 20 to confirm momentum presence and ensures calculations are valid (non-null).
• Simple Moving Average (SMA) (direction) — Acts as the primary directional anchor to prevent trading against the long-term trend.
• Ichimoku Kinko Hyo (entry) — Provides entry confirmation when price clears the 'Kumo' (Cloud), signaling a breakout from equilibrium.
• CCI / Connectable [Azullian] (exit) — Identifies momentum exhaustion; exits when price mean-reverts from extreme overbought/oversold levels.
• Custom 004 Liquidity Map with Drawings (risk) — Uses the 20-period High/Low (liquidity levels) to set hard stops and calculate position size based on market structure.
• Indicator Sample Skeleton (volatility_filter) — A data-integrity filter that inhibits trading until the chart contains enough history for the Ichimoku and SMA calculations to stabilize.

Known failure conditions

• Prolonged period of ADX < 20 across multiple timeframes.
• Price frequently oscillating through the Ichimoku Cloud without hitting the exit thresholds.
• Liquidity levels (20-period HH/LL) becoming too tight, leading to stop-outs by minor noise.

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