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ObeliskIM_v1_1 Strategy Analysis

Table of Contents​

  1. Strategy Overview
  2. Design Philosophy and Theory
  3. Technical Indicator System
  4. Ichimoku Cloud Deep Dive
  5. Entry Signal Logic
  6. Exit Signal Logic
  7. Risk Management
  8. Parameter Configuration
  9. Strategy Optimization
  10. Backtesting and Practice
  11. Summary

1. Strategy Overview​

1.1 Background​

ObeliskIM_v1_1 is a trend-following strategy based on the Ichimoku Kinko Hyo, created by trader Obelisk in March 2021. According to the author, the strategy emerged from watching a YouTube video about the Ichimoku Cloud, then waking up at 3 AM unable to sleep and writing the first version. This "inspiration-driven" development approach is not uncommon in quantitative trading.

1.2 Positioning​

Medium-to-short-term trend trading on the 5-minute timeframe, capturing intraday trend opportunities. Uses Ichimoku's multi-signal confirmation mechanism combined with fast EMA trend filtering — entering at early trend stages, exiting at reversals.

1.3 Core Features​

  • Multi-dimensional confirmation: Ichimoku + EMA, multiple confirmations before entry
  • Early trend entry: TK Cross signals trend initiation
  • Strict risk control: 4% stop-loss, phased ROI
  • Anti-chasing design: Spike detection prevents buying at price peaks

2. Design Philosophy and Theory​

2.1 Ichimoku Core Concept​

Ichimoku (Ichimoku Kinko Hyo) was invented by Goshu Hosoda in the 1930s — a system designed to let traders assess market trend, momentum, and support/resistance with one chart look. Its unique feature: incorporating time dimensions via displacement, with the "cloud" predicting future support/resistance zones.

2.2 Trend-Following Philosophy​

"Trend is your friend" — strategy enters at early trend stages rather than attempting to predict bottoms or tops. Benefits:

  • Follows established trends, avoids counter-trend risks
  • Signal reliability from confirmed trend initiation
  • Simple, consistent execution rules

2.3 Multi-Confirmation Design​

Each entry requires multiple conditions simultaneously — "better to miss an opportunity than to make a mistake". Every entry backed by: Ichimoku trend confirmation + TK Cross trigger + EMA momentum + price spike check.

3. Technical Indicator System​

3.1 EMA Triple System​

Extremely short periods for 5-minute framework:

  • EMA3: 3-period EMA — captures short-term momentum
  • EMA5: 5-period EMA — confirms short-term direction
  • EMA10: 10-period EMA — filters noise
ema35_ok = (EMA3 > EMA5) AND (EMA5 > EMA10)

Bullish when EMA3 > EMA5 > EMA10 (ascending arrangement).

3.2 Spike Detection​

spike = close > (close.shift(3) * (1 - stoploss * 0.9))

Prevents buying when price surged >3.6% in 3 candles — anti-chasing protection.

3.3 Recent High​

recent_high = high.rolling(12).max()

Entry requires price breaking above the 1-hour (12 × 5min) recent high.

4. Ichimoku Cloud Deep Dive​

4.1 Custom Parameters​

ComponentStandardStrategyRationale
Conversion Line920Reduced noise, more stable
Base Line2660Adapted for 5-minute
Lagging Span52120More stability
Displacement2630Fine-tuned cloud position

4.2 Strong Green Cloud​

cloud_green_strong = (cloud_green) AND (tenkan_sen > kijun_sen) AND (kijun_sen > senkou_a)

Three-way bull confirmation: cloud green + Conversion above Base + Base above cloud.

4.3 TK Cross Signal​

tk_cross_up = crossed_above(tenkan_sen, kijun_sen)
tk_cross_up.fillna(method='ffill', limit=2)

TK Cross signal extends forward 2 candles — allows flexibility to enter shortly after cross.

5. Entry Signal Logic​

Six conditions all required:

  1. cloud_green_strong > 0: Full bull trend confirmation
  2. tk_cross_up > 0: Trend initiation trigger
  3. ema35_ok > 0: Short-term momentum confirmed
  4. close > close.shift(): Current candle bullish
  5. close > recent_high.shift(): Broke 1-hour high
  6. spike < 1: Not chasing a spike

Combined logic: Big trend confirmed → Trend starting → Momentum confirmed → Price rising → Breaking out → Not chasing = BUY.

6. Exit Signal Logic​

Two OR conditions — either triggers exit:

  1. TK Cross Down: Conversion Line crosses below Base Line
  2. Price Below Base Line: Close falls below Kijun-sen

Simple and direct — "trend reverses = exit." With 4% stop-loss as floor protection.

7. Risk Management​

7.1 Stop-Loss: -4%​

Tight stop appropriate for 5-minute framework, prevents large single-trade losses.

7.2 Phased ROI​

minimal_roi = {
    "0": 0.10,   # 10% immediate target
    "30": 0.05,  # 5% after 30 min
    "60": 0.02   # 2% after 60 min
}

Early strong trend = hit 10%; moderate trend = 5%; late exit = 2%.

7.3 Time = Risk​

Longer hold → lower target. Acknowledges time uncertainty.

8. Parameter Configuration​

Timeframe: 5 minutes (fixed) Ichimoku: 20-60-120-30 (custom, non-standard) EMA: 3/5/10 Stop-loss: -4% ROI: 10% → 5% → 2%

9. Strategy Optimization​

9.1 Author's Suggested Improvements​

Reduce false signals in ranging markets: Add ADX filter, ATR volatility filter, use cloud thickness.

Faster entry in strong trends: Add price retracement to Base Line as secondary entry, or lower conditions when price above cloud and breaking highs.

9.2 Additional Suggestions​

  • Add RSI filter (code defines it but doesn't use)
  • Add volume confirmation
  • Multi-timeframe: confirm with 1h trend before 5-minute entries
  • Dynamic stop-loss using cloud or ATR

10. Backtesting and Practice​

Best pairs: High-liquidity mainstream coins (BTC, ETH) Recommended data: At least 6 months, multiple market conditions Required startup candles: 288 (1 day @ 5m) Fee consideration: Set 0.1%+ for accurate results

11. Summary​

ObeliskIM_v1_1 is a well-designed trend-following strategy with solid theory, strict signal filtering, and comprehensive risk control. Its key strength is the multi-confirmation entry mechanism — entering at early trend stages while avoiding false breakouts.

Limitations include ranging market vulnerability, entry lag, unused RSI, long-only design, and single timeframe. These can be addressed through planned improvements.

Best suited for: trend-following believers, those who can accept ranging-period losses, and patient traders with strong discipline.

Document Date: March 27, 2026 Strategy Version: ObeliskIM v1.1