📈 Indicators·advanced

Ichimoku Cloud

Also called: ichimoku kinko hyo, kumo cloud

A multi-line trend indicator from Japan that visualizes support, resistance, momentum, and trend direction in a single chart overlay.

Ichimoku is a complete trading system on one chart. It plots five lines: Tenkan-sen (9-period high/low average), Kijun-sen (26-period high/low average), Senkou Span A and B (which form the cloud projected 26 periods forward), and the Chikou Span (the close shifted 26 periods back). The cloud is the centerpiece — when price is above the cloud, the trend is up; below, the trend is down; inside, the market is in transition. The beauty of Ichimoku is that it gives you trend direction, support/resistance, and momentum all in one glance. The trade ideas are simple: longs are valid above the cloud with the Tenkan crossing above the Kijun. Shorts are valid below the cloud with the opposite cross. The thicker the cloud, the stronger the trend's barrier. Ichimoku is especially popular in JPY pairs because of its Japanese origin and because Japanese institutions actually trade off it. EUR/USD and USD/JPY respect Ichimoku levels surprisingly well.

Real trade example

USD/JPY stayed above the daily Ichimoku cloud for almost 18 months from 2023 to mid-2024 — clean confirmation of the uptrend that ran from 130 to 161. Anyone respecting the cloud as filter caught most of the move.

Related terms

Moving Average

beginner

A smoothed line showing the average price over a recent period — the most-used indicator in technical analysis.

Support

beginner

A price level where buyers have historically stepped in to stop the decline and turn price back up.

Resistance

beginner

A price level where sellers have historically stepped in to stop the rally and turn price back down.

VWAP (Volume-Weighted Average Price)

advanced

An intraday indicator that shows the average price an asset has traded at, weighted by volume — used as a benchmark and dynamic support/resistance.

Keltner Channel

advanced

A volatility-based envelope around a moving average using ATR — similar to Bollinger Bands but smoother.

Parabolic SAR

intermediate

A trend-following indicator that plots dots above or below price — used to set trailing stops and identify trend direction.

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