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Strategy guide · v1.0

The Kumo Cloud
Engine.

A three-layer atmospheric trading system. The Canopy defines the climate, Launch Vectors fire the engines, and the Vapor Index reads the cabin pressure. Signals only fire when all three skies align.

Section 01

Why KCE exists.

Most retail signals fire on a single oscillator and call it edge. KCE was built on the opposite premise: no single indicator wins consistently, so we layer three independent reads of the market — macro regime, momentum ignition, and exhaustion — and only trigger when they agree.

The result is a low-volume, high-conviction feed. KCE will be silent on most tickers most days. That's the point. When it fires, the three layers have already done the filtering for you.

Section 02 · Layer 1

The Canopy.

The Canopy is your weather forecast. It's drawn from two slow moving averages — a fast and slow rolling mean of price — and the cloud they form between them.

  • Clear Skies — price floats above a bullish-stacked cloud. Macro regime supports longs.
  • Storm — price drops below a bearish-stacked cloud. Macro regime supports shorts.
  • Overcast — price is inside the Canopy. No trades fire; wait for breakout.

Rule: never take a long under Storm or a short under Clear Skies. The Canopy is the veto layer.

Section 03 · Layer 2

Launch Vectors.

If the Canopy is the climate, Launch Vectors are the ignition. They're built from two exponential moving averages and their slope — the rate at which momentum is accelerating.

  • Firing Up — fast EMA crosses above slow EMA with a positive slope. Liftoff sequence.
  • Firing Down — fast EMA crosses below slow EMA with a negative slope. Re-entry burn.
  • Idle — EMAs are flat or crossed without conviction. No thrust.
Section 04 · Layer 3

The Vapor Index.

Vapor reads the cabin pressure — a 14-period RSI, plus a divergence scanner that catches the moment when price and momentum diverge.

  • Saturated High — RSI ≥ 70. Exhaustion risk. Don't chase longs here.
  • Saturated Low — RSI ≤ 30. Capitulation risk. Don't pile into shorts here.
  • Bullish Divergence — price prints a new low, RSI prints a higher low. Reversal odds rise.
  • Bearish Divergence — price prints a new high, RSI prints a lower high. Reversal odds rise.
Section 05

How signals align.

A KCE LONG requires all three: Clear Skies + Firing Up + Balanced or Bullish Divergence. The mirror is true for SHORT.

Any other combination produces a NEUTRAL status — visible in the scan but with no actionable entry/TP/SL drawn on the chart.

Confidence scoring

Score (0–100) weights slope strength, RSI distance from saturation, and whether the EMA cross is fresh (within the last bar). High-confidence signals score 70+; medium 40–70; below 40 is informational only.

Section 06

Trading playbook.

Each fired signal carries three price levels — Entry, Take Profit, and Stop Loss.

  • 1.Enter only when all three layer banners agree (no manual overrides).
  • 2.Size by stop distance, not by ticker conviction.
  • 3.Don't add on retracement — KCE prices in pullback risk via the Canopy.
  • 4.Exit if any layer flips before TP. The thesis is broken when alignment breaks.
Section 07

Risk discipline.

KCE is informational. It is not investment advice. Past performance of any signal pattern does not predict future results. Trade with money you can afford to lose and use stops every time.

The engine will go quiet during chop. Quiet is the feature. A real edge fires infrequently — chasing every minor move is how accounts go to zero.

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