Ichimoku Cloud - The All-in-One System
Master the Ichimoku Kinko Hyo system - learn the five components, cloud signals, and trend identification with GarudaAlgo.
What is Ichimoku Kinko Hyo?
Developed by Goichi Hosoda in the 1960s, Ichimoku Kinko Hyo translates to "one look equilibrium chart." It's a comprehensive system that identifies trend direction, support/resistance, and momentum in a single glance.
Tenkan-Sen (Conversion Line)
Fast momentum (9 period high/low average)
Kijun-Sen (Base Line)
Medium momentum (26 period high/low average)
Senkou Span A (Leading Span A)
Tenkan + Kijun average (shifted 26 periods ahead)
Senkou Span B (Leading Span B)
52-period high/low average (shifted 26 periods ahead)
Chikou Span (Lagging Span)
Current close price (shifted 26 periods back)
The Kumo (Cloud)
The space between Senkou Span A and Senkou Span B forms the Kumo (Cloud). This is the heart of the system.
- Bullish Cloud: Span A is above Span B (often colored green)
- Bearish Cloud: Span B is above Span A (often colored red)
How to Interpret
1. Trend Identification
- Bullish: Price is above the cloud
- Bearish: Price is below the cloud
- Neutral: Price is inside the cloud
2. TK Crosses
When Tenkan-Sen (9) crosses Kijun-Sen (26). Strongest when it happens on the 'correct' side of the cloud.
3. Future Cloud (Kumo)
The cloud is projected 26 periods ahead, providing a glimpse of future support and resistance.
4. Chikou Confirmation
Chikou Span should be 'open' (away from price) to confirm a clean trend.
How GarudaAlgo Uses Ichimoku
GarudaAlgo Enhancement
GarudaAlgo analyzes the Ichimoku system's components as part of its trend analysis. We look for 'Perfect Ichimoku' alignment: price above cloud, bullish TK cross, bullish future Kumo, and Chikou Span above price.
What GarudaAlgo Analyzes
- Cloud Position: Bullish/Bearish price relation to Kumo
- TK Cross: Detection of Tenkan/Kijun crossovers
- Future Kumo: Analysis of projected sentiment
- Chikou Span: Confirmation of clear movement path
| Parameter | Default Value |
|---|---|
| Tenkan Period | 9 |
| Kijun Period | 26 |
| Senkou B Period | 52 |
| Displacement | 26 |
Trading Strategies
Strategy 1: Kumo Breakout
- Wait for price to close outside the Kumo
- Verify future cloud matches breakout direction
- Confirm Chikou Span is also outside of price and Kumo
- Enter in breakout direction
Strategy 2: The TK Cross
- Wait for Tenkan-Sen to cross Kijun-Sen
- Strong Bullish: Cross happens above the cloud
- Strong Bearish: Cross happens below the cloud
- Weak signals (inside cloud) are often ignored
Strategy 3: Kijun-Sen Bounce
- In a trending market, wait for price to pull back to Kijun-Sen
- Watch for price to reject Kijun-Sen and resume trend
- Kijun-Sen acts as a powerful dynamic support/resistance
Best Practices
- Avoid flat clouds — Flat cloud tops/bottoms act as magnets and indicate no clear trend
- Cloud thickness = strength — A thick cloud is harder to break than a thin one
- Don't ignore the Chikou — It's the filter that prevents trading into noise
- Use on higher timeframes — Ichimoku is most reliable on H1, H4, and Daily charts