Ichimoku Cloud — Complete Reference
Multi-component indicator providing trend, support, resistance, and momentum in one chart.
What Ichimoku Cloud is
Ichimoku Kinkō Hyō ('one glance equilibrium chart'), developed by Goichi Hosoda in the 1930s. Combines five lines: Tenkan-sen (9-period), Kijun-sen (26-period), Senkou Span A and B (forming the cloud), and Chikou Span (lagging line).
Reading the cloud
Price above the cloud = bullish trend. Price below = bearish. Price inside the cloud = transitional / no clear trend. The cloud's thickness shows trend strength: thick clouds = strong support/resistance levels.
Tenkan-Kijun cross
When Tenkan crosses above Kijun (above the cloud) = strong bullish signal. Reversed = bearish. The cross above/below the cloud matters more than just the cross alone — context matters.
Chikou Span confirmation
The Chikou Span is the closing price plotted 26 periods backward. When Chikou is above price 26 periods ago, the momentum is bullish. Many Ichimoku traders require Chikou confirmation before acting.
Future cloud (Senkou Span)
The cloud is plotted 26 periods AHEAD of current price. Looking at the future cloud color (green = bullish, red = bearish) gives a forward-looking regime view. Future cloud color changes signal regime shifts.
Where Ichimoku shines
Trending markets with clear setups. The cloud provides built-in support/resistance and trend filter in one chart. Many traders use Ichimoku as a complete standalone system.
Where Ichimoku fails
Range-bound, choppy markets. The signals whipsaw inside the cloud. Like all trend tools, Ichimoku underperforms when no trend exists.
Learning curve
Ichimoku takes weeks to internalize. The visual is dense; the rules are nuanced. But once learned, it's one of the more complete trading systems retail traders can deploy.