Does the Ichimoku Cloud strategy beat buy & hold on Tech Sector ETF (XLK)? (XLK · backtested honestly)
The Ichimoku 'cloud' is a band built from midpoints of past highs and lows, displaced forward so it derives only from past data; price above it reads bullish.
Over this period, Ichimoku Cloud on Tech Sector ETF (XLK) returned +69.2%, while simply buying and holding returned +145.7% — it lagged buy & hold by 76.5 points, with a worst drawdown of -23.0%. It traded 16 times and sat in cash about 37% of the time. It's a mechanism you test.
It lagged buy & hold over this window — that's a result, and a backtest you can kill for free just did its job. Re-tuning this same idea until it looks better only adds another shot at looking good by luck, so the honest next move is a fresh one: test a different strategy on Tech Sector ETF (XLK), or build your own — free. Most ideas die cheaply right here, and that's exactly how the rare one that holds up gets found.
Or stop here — walking away from an idea that didn't beat simply holding is a result, not a failure.
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Change the parameters and the window, then re-run — no account needed.
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Build your own on Tech Sector ETF (XLK) →Two real trades from this backtest
Shown at the modeled fills — entries at the next open; a stop at its level, or at that day's open if the day opened past it; a target at its level; costs on. A single trade is never a signal and says nothing about the next one — not the best or worst, a middling winner and a middling loser among the completed trades.
16 trades total — 7 winners, 9 losers (44% won). Below is one of each, not a scoreboard. One position is still open at the window end — its result is unrealized and is counted in the totals above at its current mark, not shown as a card below.
- Entry. A long entry fired; filled at the next open on 2025-01-21 at $117.44 — never the signal bar's own close.
- Held. 5 daily bars.
- Exit. Exited on 2025-01-28 at $114.56 (the exit rule fired (filled at the next open)).
- Result. -2.56% after costs.
The worst single trade in this whole test reached -7.63%.
- Entry. A long entry fired; filled at the next open on 2023-11-06 at $86.00 — never the signal bar's own close.
- Held. 113 daily bars.
- Exit. Exited on 2024-04-19 at $97.92 (the exit rule fired (filled at the next open)).
- Result. +13.76% after costs.
Trading costs + slippage (0.10%) are already deducted from every figure above. One trade is never the edge — it's the whole distribution (the win rate, the losers, the reality-check) that matters; this just makes the mechanics concrete. It describes the past; it is not a prediction.
A live badge that re-runs itself and links back here. Free to embed on any blog, newsletter or forum — it shows the honest result, beat or lagged.
<iframe src="https://stratsemble.com/embed/tech-sector-etf-ichimoku-backtest" width="360" height="340" style="border:0;border-radius:12px;max-width:100%" loading="lazy" title="Does the Ichimoku Cloud strategy beat buy & hold on Tech Sector ETF (XLK)?"></iframe>See which strategies actually beat buy & hold — and which only look like they do.
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- • The strategy line is Ichimoku Cloud on Tech Sector ETF (XLK); the dashed line is simply buying and holding XLK. Beating the dashed line is the whole point — many strategies don't.
- • Max drawdown is the worst peak-to-trough fall you'd have sat through. A higher return with a much deeper drawdown is not obviously better.
- • Every fill assumes next-open execution with costs & slippage on — no acting on prices you couldn't have known.
- • A small number of trades means a small sample. Treat a great-looking result on a handful of trades with suspicion.
This is a hypothetical backtest of a well-known mechanism on past data. It is not advice, not a prediction, and not a claim that the strategy works. We hold no funds and place no orders. The value here is the ability to test an idea honestly — see where it would have helped, and where it would have hurt — before you ever risk real money on your own broker.
How this is computed → · who's behind it · where a backtest fits
See what actually beats buy & hold — most don't, here are the rare few that do →