Ichimoku Cloud
A multi-component indicator system built around a 'cloud' of two projected lines, used to read trend direction, momentum, and support/resistance at once.
The Ichimoku Cloud, developed by Goichi Hosoda, is a multi-component indicator system consisting of five separate lines: the Tenkan-sen (conversion line) and Kijun-sen (base line), two faster-reacting trend references; the Senkou Span A and Senkou Span B (leading spans), plotted ahead of current price and together forming the "cloud" (kumo); and the Chikou Span (lagging span), the current close plotted back in the past.
The cloud itself is read as a dynamic support/resistance zone — price trading above it is commonly read as bullish, below it as bearish, and inside it as a sign of an unclear, range-bound trend — letting a single indicator system convey trend direction, momentum, and key levels together. See Kaavon's dedicated Ichimoku Cloud article for how all five components are actually calculated and read together.
Examples
- Price trading above the Ichimoku Cloud is commonly read as a bullish trend context; price trading inside the cloud is commonly read as an unclear, range-bound one.
- The Ichimoku Cloud's leading spans are plotted ahead of current price, projecting the cloud's shape forward rather than only showing where price has already been.