Ichimoku Cloud (Ichimoku Kinko Hyo)
Ichimoku Cloud (Ichimoku Kinko Hyo)
What is Ichimoku?
Ichimoku Kinko Hyo ("one-glance equilibrium chart"), developed by Goichi Hosoda, is a comprehensive indicator system that defines support/resistance, trend direction, momentum, and trading signals — all from a single chart overlay. It consists of five lines and a shaded "cloud" region.
How it works
Tenkan-sen (Conversion) = (Highest High(9) + Lowest Low(9)) / 2
Kijun-sen (Base) = (Highest High(26) + Lowest Low(26)) / 2
Senkou A (Leading A) = (Tenkan + Kijun) / 2, plotted 26 bars ahead
Senkou B (Leading B) = (Highest High(52) + Lowest Low(52)) / 2, plotted 26 bars ahead
Chikou (Lagging) = Close plotted 26 bars behind
The area between Senkou A and Senkou B forms the "cloud" (Kumo).
Key features
- All-in-one — trend, support/resistance, momentum, and signals from a single indicator.
- Cloud (Kumo) — provides future support/resistance zones.
- Five lines — each captures a different time dimension.
- Works best on daily charts — originally designed for Japanese stock market daily data.
Trading signals
Trend direction
- Price above the cloud — bullish.
- Price inside the cloud — neutral/indecision.
- Price below the cloud — bearish.
Cloud color
- Senkou A above Senkou B — bullish cloud (often green).
- Senkou B above Senkou A — bearish cloud (often red).
TK Cross
- Tenkan crosses above Kijun — bullish (stronger if above cloud).
- Tenkan crosses below Kijun — bearish (stronger if below cloud).
Chikou confirmation
- Chikou above price 26 bars ago — confirms bullish signal.
Parameters
| Parameter | Default | Description | |-----------|---------|-------------| | Tenkan | 9 | Conversion line period | | Kijun | 26 | Base line period | | Senkou B | 52 | Leading Span B period |
Example conditions
| Condition | Meaning |
|-----------|---------|
| close > ICHIMOKU(9) | Price above Tenkan-sen (Conversion line) |
| ICHIMOKU(9) cross_over ICHIMOKU(26) | TK Cross — Tenkan crosses Kijun upward |
| close > ICHIMOKU(52) | Price above Senkou B level — above the cloud |
Tips
- Ichimoku is most reliable on daily and weekly charts — avoid using on very short timeframes.
- The thicker the cloud, the stronger the support/resistance.
- A "Kumo twist" (cloud color change) often precedes a trend reversal.
- Wait for all five lines to align for the strongest signals.
- Ichimoku was designed for Japanese equities but works well on forex and crypto too.