What Is Ichimoku Cloud (Ichimoku)?
Ichimoku Cloud is a comprehensive trend system showing support, resistance, momentum, and future price zones in one overlay.
Quick Answer
Ichimoku Cloud is a comprehensive trend system showing support, resistance, momentum, and future price zones in one overlay.
What Does Ichimoku Measure?
Ichimoku Kinko Hyo was developed by Goichi Hosoda in the late 1930s. The system plots five components: Tenkan-sen (conversion line), Kijun-sen (base line), Senkou Span A and B (forming the cloud or Kumo), and Chikou Span (lagging line). The cloud color indicates trend bias — price above a green cloud is bullish, below a red cloud is bearish. Because the cloud is projected forward, it acts as a dynamic support/resistance zone. Ichimoku is most effective on daily and higher timeframes. VaultCharts renders the full Ichimoku Cloud as a free overlay on desktop charts.
Conversion = (9-period high + 9-period low) / 2; Base = (26-period high + 26-period low) / 2; Span A = (Conversion + Base) / 2, shifted forward 26 periodsHow to Read Ichimoku
- 1Price above the cloud indicates bullish trend
- 2Price below the cloud indicates bearish trend
- 3Cloud thickness reflects support/resistance strength
- 4Conversion crossing above Base signals bullish momentum (TK cross)
How to Use Ichimoku in Trading
Ichimoku Settings
| Setting | Default | Description |
|---|---|---|
| Conversion Period | 9 | Lookback for Tenkan-sen (conversion line) |
| Base Period | 26 | Lookback for Kijun-sen (base line) |
| Span Period | 52 | Lookback for Senkou Span B |
| Displacement | 26 | Forward shift for cloud and lagging span |
Common Mistakes to Avoid
Use Ichimoku in VaultCharts
VaultCharts includes Ichimoku Cloud with customizable settings. Combine it with our automated pattern detection and trade signals for better analysis.