31# Ichimoku Breakout Range bar trading

Joy22 2025 update

Ichimoku Breakout Range Bar Trading is designed for professional intraday traders focused on scalping and short-term directional trades. It uses range bar charts alongside the Ichimoku Cloud and the Awesome Oscillator for confirmation. It avoids noisy markets and weak breakouts through simple but effective price action filters.

Markets: Gold (XAUUSD), Major Indices (NASDAQ, DAX, S&P500), Selected Stocks
Timeframes: Range bar charts only
Platform: MT4 (custom Ichimoku + range bars) and cTrader (native tools)

This system is not designed for forex currency pairs. It performs best in volatile, directional environments during the London and New York sessions.

Trading Hours (GMT)

• 00:00–04:00 – Avoid: high risk of false breakouts, low volume

  07:00–11:00 – London Open: good momentum

  12:00–16:00 – Pre-New York & NY Open: excellent

  16:00–20:00 – US session continuation: ideal

Chart Setup (MT4 & cTrader)

• Chart Type: Range Bars

  • Gold: Range 80 to 200 pips (typical: 100–120 for intraday, 80 for scalping)

    Indices:

    • NASDAQ: 20–30 points

      DAX: 10–15 points

      S&P500: 5–10 points

    Stocks: adjust based on ATR (use 0.1–0.2 × daily ATR for range size)

• Time Filter:

  • No trades from 00:00 to 04:00 GMT (high probability of false breakouts)

    Preferred trading sessions: London Open to NY Close (07:00–20:00 GMT)

MT4 Setup:

• Chart Type: Custom Range Bar Chart (offline chart or plugin)

  Indicators: all default setting

  • Awesome Oscillator

    ZB Cloud line

    ZB Candle

    ZB Matrix

cTrader Setup:

• Chart Type: Range Bars

  Indicators:

  • Ichimoku Cloud (native)

    Awesome Oscillator

Entry Rules

Bullish Setup:

1. Price breaks above the Kumo cloud;

   Two consecutive green candles above the cloud (range bars);

   Entry at the open of the third green candle;

   AO must not contradict (preferably green bars above zero);

   ZB Matrix is green MT4.

Bearish Setup:

1. Price breaks below the Kumo cloud;

   Two consecutive red candles below the cloud;

   Entry at the open of the third red candle;

   AO must not contradict (preferably red bars below zero);

   ZB Matrix is red MT4,

Avoid flat Kumo breakouts, low-volume environments, and candles formed during restricted time zones.

Structured Re-entry Rules (Max 1)

If a breakout setup has already occurred and was missed or closed early, only one re-entry is allowed under the following structured condition:

• Price makes a pullback to the Kijun-sen or previous range consolidation

  A new 2-candle sequence appears in the trend direction (green/red)

  Chikou Span still confirms the trend

  No contradiction from the AO

Re-entries must not be taken in flat markets or after prolonged trend exhaustion. No more than 1 re-entry per direction per asset.

Risk & Money Management

• Risk per trade: 0.5% to 1% (never more than 1.5% in high-confluence setups)

  Reward/Risk Ratio: 1:1 to 1:1.3 fixed

  Stop-Loss: behind Kijun or 1.5x the range bar size

  Take Profit: 1.3 x the stop distance

  Trades per day: Max 5, stop after 3 consecutive losses.

  Drawdown limit: pause trading if weekly loss > 4–5%

  If you want to have an aggressive money management you should focus only on the New York session.
  Aggressive progression every time you lose you increase by one unit except for the first level where you replicate 1.

  Example progression
  1-1-2-3-4 3-2-1-1
  Trading only in the New York session time 15:00-19:30 GMT Berlin, it is very difficult for the progression to increase much. Ratio Stop Loss /profit Target in this case 1:1.

Final Note

Although built on visual and logical clarity, this strategy is by no means "simple" in nature. It integrates trend structure, momentum confirmation, market timing, and volatility awareness — making it a professional-grade tool when executed with discipline. The key lies in patience and selectivity, not constant market chasing.

Notes

• This strategy performs best on assets with strong directional impulse, like Gold during NY session, DAX/NASDAQ around market open, and stocks with earnings/news drivers.

  Avoid applying this to FX pairs due to excessive noise and less reliable Kumo breaks on range charts.

Even though the system may appear simple at first glance, it is built on precise and layered confirmations. When executed with discipline, this is a professional-grade strategy suitable for consistently exploiting intraday volatility on major indices, gold, and select stocks. 

Submit by Leo 30/03/2015

Ichimoku Breakout is a trading system based on range bar chart trend following.

Markets: Indices, Commodities and Forex Majors.

Put these in the indicator folder:

ZB-CloudCandles.ex4

ZB-CloudLines.ex4

ZB-CloudMatrix.ex4

RenkoRangeBarsV1.2 R_KG.ex4

Put the following in the Experts folder:

ichimoku_u1.ex4

Put the following in the templates folder:

ichimoku_ea_u1.tpl

Open a blank chart of any pair.

Go under file and open your off line chart M20

Attached the ichimoku_u1_seller9 template and it should look like the following.

With this EA version you need to start the EA in the proper direction of Buy or Sell. Since in this case it is already in Sell mode the next would a Buy when it crosses back up through the cloud and breaks out the top. Open expert settings and set the proper direction. This EA should toggle back and forth between Buy and Sell as it crosses back and forth across the Kumo Cloud. It may get out of sequence at times so check on it to make sure it is looking for the next most likely trade.

In the pictures trading rules for Ichimoku Breakout Range bar trading.