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Ichimoku Cloud

What is the 'Ichimoku Cloud'

The Ichimoku cloud is a chart used in technical analysis that shows support and resistance, and momentum and trend directions for a security or investment. It is designed to provide relevant information at a glance using moving averages (tenkan-sen and kijun-sen) to show bullish and bearish crossover points. The "clouds" (kumo, in Japanese) are formed between spans of the average of the tenkan-sen and kijun-sen plotted six months ahead (senkou span B), and of the midpoint of the 52-week high and low (senkou span B) plotted six months ahead.




Explaining 'Ichimoku Cloud'

The ichimoku cloud was developed by Goichi Hosoda, a Japanese journalist, and published in the late 1960s. It provides more data points than the standard candlestick chart.


The overall trend is up when prices are above the cloud, down when prices are below the cloud and flat when they are in the cloud itself. When senkou span A is rising above senkou span B the trend is stronger upward, and is typically colored green. When senkou span B rises above senkou span A, the trend is stronger downward and is denoted with a red-colored cloud.


Further Reading


Can the Leading Us Energy Stock Prices Be Predicted Using Ichimoku Clouds?
papers.ssrn.com [PDF]
… in volatility in economic activity which led various economies to adopt more adequate fiscal and … Note: Figure 3 shows the Ichimoku Clouds for the leading energy stocks of the S&P Composite 1500 Energy … The Cloud is made of the Leading Span A and Leading B as boundaries …

The profitability of Ichimoku Kinkohyo based trading rules in stock markets and FX marketsThe profitability of Ichimoku Kinkohyo based trading rules in stock markets and FX markets
onlinelibrary.wiley.com [PDF]
… in volatility in economic activity which led various economies to adopt more adequate fiscal and … Note: Figure 3 shows the Ichimoku Clouds for the leading energy stocks of the S&P Composite 1500 Energy … The Cloud is made of the Leading Span A and Leading B as boundaries …

Short-term foreign exchange rate trading based on the support/resistance level of Ichimoku KinkohyoShort-term foreign exchange rate trading based on the support/resistance level of Ichimoku Kinkohyo
ieeexplore.ieee.org [PDF]
… in volatility in economic activity which led various economies to adopt more adequate fiscal and … Note: Figure 3 shows the Ichimoku Clouds for the leading energy stocks of the S&P Composite 1500 Energy … The Cloud is made of the Leading Span A and Leading B as boundaries …



Q&A About Ichimoku Cloud


How does the Ichimoku Cloud provide relevant information at a glance?

The Ichimoku cloud uses moving averages to show bullish and bearish crossover points.

Are there any other indicators used along with the Ichi Cloud Chart to make trading decisions based upon price action alone?

There may be additional indicators used along with the Ichi Cloud Chart to make trading decisions based upon price action alone but this depends on personal preference as well as market conditions at hand during each individual trade decision made by traders using these tools in their daily trading activities while working

What are the "clouds" of the Ichimoku Cloud called?

The clouds of the Ichimoku cloud are called Kumo in Japanese.

What is the Ichimoku Cloud?

The Ichimoku cloud is a chart used in technical analysis that shows support and resistance, momentum and trend directions for a security or investment.

Where do you find Kumo on an Ichi cloud chart?

You can find Kumo between Senkou span B (6 months ahead) and Senkou span A (52 weeks).

Is there more than one type of Ichi Cloud Chart available for use with different time frames or markets?

Yes, there are many types of charts available for use with different time frames or markets.

What does it mean when prices are below Kumo on an Ichi cloud chart?

Prices are trending downward.

What does it mean when prices are above Kumo on an Ichi cloud chart?

It means that prices are trending upward.

When is there no trend indicated by an Ichi cloud chart?

When prices fall into Kumo, there is no trend indicated by an Ichi cloud chart.

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