Ichimoku Cloud Strategy Backtest: EUR/USD, 1-Hour, 4-Hour and Daily Bars, 2004 to 2026

00The verdict in three lines

• We tested the classic Ichimoku Cloud (9, 26, 52) on EUR/USD from 2004 to 2026, the market people search for most with it, on 1-hour and 4-hour bars (the usual forex charts) and on daily bars (what it was designed for): the TK cross taken on the side of the cloud, and the breakout out of the cloud confirmed by the Chikou, both closed when price closes back through the Kijun-sen. About 1 pip of costs a trade.
• About one win in three. The win rate was 31.5% to 40.6%. The Kumo breakout lost on every timeframe; the TK cross was close to zero on 1-hour and 4-hour bars.
• The daily TK cross came closest: +4,026 pips over 96 trades, positive on longs and shorts, and narrowly above the control. But 96 trades in 22 years are too few for our gates, its development t-statistic was 1.15 (2.5 needed) and the 2020 to 2026 holdout ended flat. All six Buried.

01What we tested

• The lines, standard settings: Tenkan-sen, the midpoint of the 9-bar range; Kijun-sen, of the 26-bar range; the cloud from Senkou Span A (the average of Tenkan and Kijun) and Span B (the midpoint of the 52-bar range), both plotted 26 bars ahead; the Chikou Span, the close compared with the close 26 bars earlier.
• TK cross (IC-TK): buy when the Tenkan crosses above the Kijun with the close above the cloud; sell when it crosses below with the close below the cloud.
• Kumo breakout (IC-KUMO): buy when the close moves above the cloud and the Chikou confirms (the close is above the close 26 bars back); sell the mirror.
• Exit (both): after the first bar that closes back through the Kijun-sen, the usual Ichimoku trailing exit. No target, no other stop. One position at a time; entries and exits at the next minute's open.
• Six variants: each entry on 1-hour, 4-hour and daily bars, long and short. Results in pips. With six variants the development t-statistic bar is 2.5.

02Data and costs

EUR/USD spot, the 1-minute bid history of an IC Markets MetaTrader 4 demo server, January 2004 to 28 September 2026. 4-hour and daily bars are cut at 17:00 New York, the start of the forex day. Costs: about 1 pip per round trip (0.15 pip on every fill plus 0.7 pip commission). Periods: development 2004 to 2012, validation 2013 to 2019, holdout 2020 to 2026, already used by our earlier EUR/USD tests. Engine check: a self-test with hand-worked cases and an independent re-implementation that matched every trade of all six variants (ic_selftest_result.txt).

03Results

Net is the sum of the trades' results in pips after costs. The win rate is the share of trades that ended positive, with its 95% range.

Cumulative net pips by month for four of the variants. * Holdout already used before this test.

By period

04Long, short, holding time and financing

Scenario A charges 2% a year of the entry price for every calendar day held; scenario B applies today's IC Markets EUR/USD swap (long -7.99, short +1.31 points per lot per night, Wednesday counting three), not a historical rate. The verdict uses the result without financing.

05Is it the signal or chance?

The moved-entry control: every real entry moved by one random offset of whole days, at least 5% of the series, to the same time of day on another day, same direction, then closed by the same Kijun exit, with the same costs; 500 runs with fixed seeds. The bar is the 95th percentile of the average net pips per trade.

Only the daily TK cross sat above the 95th percentile, and only narrowly (with the corrected clock it falls below, see the data notes).

06The gates

07Verdict by variant

Fragile (daily TK cross): positive and narrowly above the control, but too few trades per period, a development t-statistic far below 2.5 and a flat holdout. Costs: positive before costs, negative after. No proven edge: negative before costs, or too close to zero to tell. Not tested: other Ichimoku settings and rules, other markets.

TWhat this shows, and what to take into your own tests

What the results show

• The “success rate” of these Ichimoku rules on EUR/USD was 31.5% to 40.6%: they win about one trade in three, with winners about twice the size of losers.
• The Kumo breakout lost in every timeframe, -5,744 pips on 1-hour bars; on 1-hour and daily bars it lost even before costs.
• The TK cross on daily bars, Ichimoku as it was designed, made +4,026 pips over 96 trades and beat the control narrowly (95.6), but with 36 / 32 / 28 trades per period, a development t-statistic of 1.15 and a flat holdout it does not pass.

What remains unknown

• Other Ichimoku settings and rules (the cloud colour, the Chikou against price, a stop at the Kijun on entry) and other markets; we tested the two most common entries with the usual exit.
• Whether the daily TK cross holds on more markets: about four trades a year on one pair is too few to tell.

Why it failed

On intraday EUR/USD bars the Tenkan, Kijun and cloud react to the same recent ranges, and their signals came no better than chance: a third of the trades won, the winners were about twice the losers, and that leaves almost nothing before a pip of cost. The daily cross catches EUR/USD's larger trends, which is what Ichimoku was built for, but a few trades a year over 22 years are not enough to tell skill from luck, and it made nothing from 2020 on.

What you can apply to your own tests

• Ask what an indicator was built for: Ichimoku on daily bars did far better here than on 1-hour bars.
• A positive result with too few trades is still an open question; count the trades in each period.
• Check whether a data issue changes your verdict: here the corrected clock changed some numbers and no verdict.

A note on the numbers: drawdown figures are measured on closed trades unless a table says it includes open losses. Open losses inside a trade are not counted in a closed-trade drawdown, so real account risk is higher, especially for systems with no stop. Backtests are not live trading.

FAQCommon questions

What is the win rate of the Ichimoku Cloud strategy?

About one in three in our test: 31.5% to 40.6% across six variants on EUR/USD from 2004 to 2026, with winners about twice the size of losers.

Does Ichimoku work better on daily charts?

It did better here: the TK cross on daily bars made +4,026 pips over 96 trades after costs, while on 1-hour bars it lost. But 96 trades in 22 years were too few to tell skill from luck, and from 2020 on it made nothing.

How was the Ichimoku strategy tested?

On EUR/USD spot 1-minute broker data from 2004 to 2026, built into 1-hour, 4-hour and daily bars cut at 17:00 New York, with the standard 9, 26, 52 settings, about 1 pip of costs a trade and rules written and dated before the data was run, costs included on every trade, results split into development, validation and holdout periods, a random-entry control as the benchmark, and every variant reported. Read the protocol.

08Check our arithmetic

Code provenance: our own code, written from the standard Ichimoku definitions and the rules as fixed in the specification. No third-party source code is used or published.

09Data notes

Clock. The time stamps of this file are about one hour early in most weeks of 2004 to 2014 (our clock audit). For 4-hour and daily bars cut at 17:00 New York this moves an hour of trading across a bar boundary in those weeks. We ran the test again on a copy with corrected time stamps: no verdict changed; the daily TK cross lost its narrow pass of the control:

Gaps. Removing the trades open across a suspect or unclear gap in the data changes no verdict:

Source. A broker's demo history, not an exchange record; costs are constant across years.

10Corrections

22 Oct 2026, navigation: added a link to the new guide comparing trading costs across all our tests. No result changed. 22 Oct 2026, navigation: added a link to the new guide comparing trend following and mean reversion across all our tests. No result changed.

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