Tools & IndicatorsIchimoku
TrendAdvanced[ MP.IND.ICHIMOKU ]
Ichimoku
Ichimoku Kinko Hyo
The Ichimoku Cloud ('equilibrium at a glance' in Japanese), developed by journalist Goichi Hosoda between the 1930s and 1960s (published in 1969 after 30 years of research), is a complete technical analysis system that provides in a single indicator information on trend, momentum, support, resistance and entry timing.
Category
Trend
Difficulty
Advanced
Markets
Forex, Indices, Stocks
Timeframe
4H, Daily
Combinations
3 tools
Signals
7 setups
LIVE CHARTIchimoku ACTIVE
[ HOW TO READ THE CHART ]
Green Zone: Price above green cloud → Strong uptrend: only long
Red Zone: Price below red cloud → Strong downtrend: only short
Main Line: Tenkan cross above Kijun ABOVE the cloud → Strong buy (Golden Cross ICH)
Confluence: Combine Ichimoku with RSI for maximum probability
[ WHAT TO WATCH ON THE CHART ]
Observe how Ichimoku behaves relative to key price points. Note moments when the indicator reaches extreme levels and how price reacts. Look for divergence patterns between the indicator and price movement.[ FORMULA ]
Tenkan-sen = (highest9 + lowest9) / 2 Kijun-sen = (highest26 + lowest26) / 2 Senkou Span A = (Tenkan + Kijun) / 2 [projected +26 periods] Senkou Span B = (highest52 + lowest52) / 2 [projected +26 periods] Chikou Span = Current Close [projected -26 periods]
What signals does Ichimoku generate?
Price above green cloud → Strong uptrend: only long
Price below red cloud → Strong downtrend: only short
Tenkan cross above Kijun ABOVE the cloud → Strong buy (Golden Cross ICH)
Chikou Span above price 26 periods ago → Bullish confirmation
Kumo Twist (color change) in the next 26 candles → Reversal alert
Kijun as support in uptrend: retest + bounce → Long entry
All 5 conditions aligned → 'Strong' setup: maximum reliability
What is Ichimoku and how does it work?
The Ichimoku Cloud ('equilibrium at a glance' in Japanese), developed by journalist Goichi Hosoda between the 1930s and 1960s (published in 1969 after 30 years of research), is a complete technical analysis system that provides in a single indicator information on trend, momentum, support, resistance and entry timing. The 'cloud' (Kumo) is the most distinctive visual element: it's projected 26 periods into the future, making future support and resistance visible before price even reaches them — a unique feature in traditional technical analysis. In Japan, Ichimoku is the most used technical analysis tool by institutional traders, much more than RSI or MACD.
How do you use Ichimoku in trading?
The Ichimoku system has a 5-step analysis process:
1) MAIN BIAS — Position relative to the Cloud:
- Price above the green cloud = confirmed uptrend, only long
- Price below the red cloud = confirmed downtrend, only short
- Price in the cloud = transition zone, uncertain market, avoid new positions
- Green cloud (Senkou A > Senkou B) = bull market
- Red cloud (Senkou A < Senkou B) = bear market
2) ENTRY SIGNAL — Tenkan/Kijun cross:
- 'Golden Cross ICH': Tenkan crosses above Kijun ABOVE the cloud = strong buy signal
- 'Dead Cross ICH': Tenkan crosses below Kijun BELOW the cloud = strong sell signal
- Cross inside the cloud = weak signal, better to avoid
3) CONFIRMATION — Chikou Span:
- Chikou Span above price 26 periods ago = bullish confirmation
- Chikou Span below price 26 periods ago = bearish confirmation
- Chikou in the projected cloud = potential resistance
4) STOP LOSS:
- In a long: stop below the Kijun or below the cloud (more conservative)
- The Kijun acts as a natural trailing stop: as long as it's below the price, hold
5) KUMO TWIST (future cloud reversal):
- When the future cloud color changes (twist) in the next 26 candles, it anticipates a sentiment shift
- A Kumo Twist after a period of strong trend is often the first signal of exhaustion
'ALL IN' setup: All 5 conditions aligned = maximum signal reliability.
What are the strengths of Ichimoku?
Complete all-in-one system: eliminates the need for other indicators
Anticipates future support and resistance thanks to the cloud projection
Very popular among Asian institutions
Includes natural trailing stop (Kijun)
What are the limitations of Ichimoku?
Steep learning curve: requires weeks to master
Visually complex for beginners
Doesn't work well on low TFs
Many components to monitor simultaneously
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