Ichimoku Cloud
Original schematic showing the guide's principal visual relationships.
Tenkan 9-period midpoint; Kijun 26-period midpoint; cloud spans use their average and the 52-period midpoint shifted forward.
Formula and components
A multi-line system combining trend, momentum, projected support, and resistance.
Tenkan 9-period midpoint; Kijun 26-period midpoint; cloud spans use their average and the 52-period midpoint shifted forward.
How it works
The indicator transforms price, range, or volume observations over a selected lookback. Shorter settings react faster but create more noise; longer settings respond more slowly and emphasize the underlying regime. Always compare the reading with price structure and timeframe.
How to read it
Price above the cloud favors an upward regime, below favors downward, and inside signals uncertainty. Line alignment and cloud thickness add context.
Practical example
Price above a rising cloud, with Tenkan above Kijun, describes aligned upward conditions. A move inside the cloud reduces conviction because projected support and resistance overlap; a close below the cloud changes the broader regime.
Confirmation checklist
Use slope, price position, and agreement across more than one lookback. A trend reading is more reliable when price structure and directional strength point the same way.
Limitations and false signals
The number of components invites selective interpretation, and default periods may not fit markets that trade on different schedules.
Limitations and false signals
Frequently asked questions
What does this pattern or indicator describe?
A multi-line system combining trend, momentum, projected support, and resistance.
How should the signal be confirmed?
Price above the cloud favors an upward regime, below favors downward, and inside signals uncertainty. Line alignment and cloud thickness add context. Use slope, price position, and agreement across more than one lookback. A trend reading is more reliable when price structure and directional strength point the same way.
What can cause a false signal?
The number of components invites selective interpretation, and default periods may not fit markets that trade on different schedules.