Ichimoku cloud
A multi-part system (Tenkan-sen, Kijun-sen, a shaded Senkou “cloud,” and the Chikou lagging line) showing trend, momentum, and support/resistance in one view — price above the cloud reads bullish, below reads bearish.
What the numbers mean
Nine and 26 are the lookbacks for the two fast lines (Tenkan-sen and Kijun-sen), 52 sets the slower cloud boundary, and 26 is also the displacement — the cloud is drawn 26 bars into the future and the lagging line 26 bars into the past. The numbers come from a six-day trading week in 1930s Japan; 20/60/120 is a common modern adjustment.
- 9 — Tenkan-sen (conversion line), the fast average of the last nine bars' high and low
- 26 — Kijun-sen (base line), the slower one; also the displacement used for the cloud and the lagging line
- 52 — the lookback for the cloud's far boundary, Senkou Span B
- 26 forward — how far the cloud is drawn into the future
- 26 back — how far the Chikou lagging line is drawn into the past
- 20/60/120 — a common modern adjustment for five-day trading weeks
How it is used
Read as a whole system: price above the cloud is bullish, below is bearish, inside is undecided. The cloud's thickness gauges how much support or resistance sits ahead, and the Tenkan/Kijun cross is the entry trigger within that context.
- Price above the cloud → bullish; below → bearish; inside → no trend worth trading
- Tenkan crossing above Kijun → the entry trigger, strongest when it happens above the cloud
- Cloud thickness ahead of price → how much support or resistance is expected
- Chikou line above the price it is drawn against → confirmation the move is genuinely new
How it relates to everything else
Ichimoku is a complete system rather than an indicator, and each line has a familiar counterpart: the Tenkan and Kijun work like a fast and slow moving average pair, the cloud works like a support and resistance zone, and the Chikou line does the job of a momentum check. Because everything is derived from the same three numbers, the parts agree by construction — which is why traders treat a setup where all five components line up as much stronger than any single crossing.
- Tenkan/Kijun cross ≈ a 9/26 moving-average crossover
- Price above cloud + Tenkan above Kijun + Chikou clear → the full bullish configuration
- A flat Senkou Span B acts as a magnet, much like a volume-profile point of control
- The 26-bar displacement is why the cloud gives advance warning that an EMA cloud cannot
What to watch for
It needs room — on a small chart or a short history the displaced cloud is unreadable, and in a tight range all five lines knot together and say nothing.