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Ichimoku
Ichimoku Cloud
Ichimoku Kinko Hyo (one look equilibrium chart) is a comprehensive indicator that provides information on support, resistance, trend direction, momentum, and signals — all in one view.
How It Works
Ichimoku uses five lines. The cloud (Kumo) between Senkou Span A and B acts as dynamic support/resistance. Price above the cloud is bullish; below is bearish.
Formula
Tenkan-sen = (9-period High + 9-period Low) / 2 Kijun-sen = (26-period High + 26-period Low) / 2 Senkou A = (Tenkan-sen + Kijun-sen) / 2 [plotted 26 periods ahead] Senkou B = (52-period High + 52-period Low) / 2 [plotted 26 periods ahead] Chikou Span = Current close plotted 26 periods back
Signal Interpretation
Price above Cloud
Bullish — cloud acts as support below price.
Price below Cloud
Bearish — cloud acts as resistance above price.
Kumo Breakout
Price breaking out of the cloud signals a potential trend change.
TK Cross
Tenkan crossing above Kijun = bullish. Crossing below = bearish.
Use Cases
- ▸Identifying overall trend at a glance
- ▸Finding strong support/resistance zones via the cloud
- ▸Generating entry signals with TK crosses
- ▸Filtering positions — only buy when price is above cloud
Limitations
- ⚠Steep learning curve
- ⚠Multiple components can create conflicting signals
- ⚠Requires longer history for accurate cloud calculation
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BazaarPulse Tip
The strongest Ichimoku signal is price breaking above a thin cloud (Senkou A ≈ Senkou B) after consolidation. This often starts major trends.