# Ichimoku Cloud > The Ichimoku Cloud shows trend, momentum and support in one view. Learn the five lines, the cloud, the standard signals and how traders use Ichimoku today. Source: https://learn.tradelabsai.com/indicators/ichimoku-cloud/ Track: Indicators · Level: Intermediate · Updated: 2026-10-03 Publisher: TradeLabs AI (https://tradelabsai.com). Education, not financial advice. Cite as: TradeLabs Learn, "Ichimoku Cloud", https://learn.tradelabsai.com/indicators/ichimoku-cloud/ Ichimoku Kinko Hyo, usually called the Ichimoku Cloud, is an all in one indicator developed by Japanese journalist Goichi Hosoda, who spent decades refining it before publishing it in 1969. The name roughly means "one glance equilibrium chart". In one view it shows trend direction, momentum, and dynamic support and resistance, including levels projected into the future. It looks complicated at first, but each line has a simple job. ## The five lines | Line | Japanese name | Calculation (default) | Role | |---|---|---|---| | Conversion line | Tenkan-sen | (9 period high + 9 period low) ÷ 2 | Short term balance; fast signal line | | Base line | Kijun-sen | (26 period high + 26 period low) ÷ 2 | Medium term balance; key support or resistance | | Leading span A | Senkou Span A | (Tenkan + Kijun) ÷ 2, plotted 26 periods ahead | One edge of the cloud | | Leading span B | Senkou Span B | (52 period high + 52 period low) ÷ 2, plotted 26 periods ahead | Other edge of the cloud | | Lagging span | Chikou Span | Today's close, plotted 26 periods back | Compares current price with past price | Unlike moving averages, the Tenkan and Kijun are midpoints of high and low ranges, not averages of closes. The space between Span A and Span B is shaded: that is the cloud, or Kumo. ## Reading the cloud - **Price above the cloud:** bullish trend. - **Price below the cloud:** bearish trend. - **Price inside the cloud:** no clear trend; consolidation. - **Cloud colour:** when Span A is above Span B, the cloud is usually shaded bullish; when below, bearish. - **Cloud thickness:** a thick cloud is strong support or resistance; a thin cloud is weak and easier to break. Because the cloud is plotted 26 periods ahead, it shows where future support and resistance may lie. ## Standard signals 1. **Tenkan and Kijun cross:** Tenkan crossing above Kijun is bullish, below is bearish. Crosses above the cloud are considered strong; crosses below the cloud weaker. 2. **Kumo breakout:** price breaking above the cloud signals a possible new uptrend; breaking below, a downtrend. 3. **Chikou confirmation:** the lagging span above price from 26 periods ago supports a bullish view; below, bearish. 4. **Kijun as support:** in trends, pullbacks often find support or resistance at the Kijun line. **Example: A full Ichimoku buy setup** A stock has traded inside a thin cloud for weeks. It closes above the cloud. The Tenkan crosses above the Kijun, both above the cloud. The Chikou span is above the price of 26 days earlier, and the future cloud ahead has turned bullish. All elements agree. A trader buys with a stop below the Kijun line, which sits about 3% below the entry. ## How traders use Ichimoku - **Trend filter:** trade long only above the cloud, short only below it. - **Pullback entries:** buy pullbacks to the Kijun or the cloud's upper edge in uptrends. - **Multi timeframe:** check the cloud on a higher timeframe for direction and a lower timeframe for entries. See [Multi-Timeframe Analysis](https://learn.tradelabsai.com/price-action/multi-timeframe-analysis/). - **Stops:** place stops beyond the Kijun or on the other side of the cloud. ## Settings The default 9, 26, 52 settings come from the Japanese trading week when Hosoda developed the system, which included Saturdays. Some traders adjust them, for example to 10, 30, 60 or for 24/7 crypto markets, but the defaults remain the most widely used, and because so many traders watch them, they tend to matter most. ## Limitations - **Visual clutter** can overwhelm beginners. - **Lag:** many components use 26 and 52 period ranges. - **Ranges:** like most trend tools, Ichimoku whipsaws in sideways markets, especially when price stays inside the cloud. ## Common mistakes - **Using one line in isolation** instead of reading the system together. - **Trading signals inside the cloud,** where trend is unclear. - **Ignoring cloud thickness** when judging support and resistance. ## Frequently asked questions ### What does the Ichimoku Cloud show? Trend direction, momentum and dynamic support and resistance, including levels projected 26 periods into the future. ### What does it mean when price is above the cloud? It suggests a bullish trend. Below the cloud suggests bearish; inside suggests no clear trend. ### What are the default Ichimoku settings? 9, 26 and 52 periods for the Tenkan, Kijun and Senkou Span B, with spans shifted 26 periods. ## Sources - Wikipedia, [Ichimoku Kinko Hyo](https://en.wikipedia.org/wiki/Ichimoku_Kink%C5%8D_Hy%C5%8D) ## Continue learning - Next lesson: [ATR (Average True Range)](https://learn.tradelabsai.com/indicators/atr/) - Previous lesson: [Supertrend](https://learn.tradelabsai.com/indicators/supertrend/) - Related: [Supertrend](https://learn.tradelabsai.com/indicators/supertrend/): Supertrend is an ATR based trailing line that flips between support and resistance as the trend changes. Learn how it is calculated, settings and how to trade it. - Related: [Moving Averages Explained](https://learn.tradelabsai.com/indicators/moving-averages-explained/): Moving averages smooth price to show the trend. Learn SMA vs EMA, popular settings like the 20, 50 and 200 day, crossovers, dynamic support and common mistakes. - Related: [Support and Resistance](https://learn.tradelabsai.com/price-action/support-and-resistance/): Support is where buying tends to stop a fall; resistance is where selling tends to stop a rise. Learn to draw levels, judge their strength and trade them well. - Related: [Trend Following](https://learn.tradelabsai.com/strategies/trend-following/): Trend following buys markets that are rising and sells those that are falling. Learn the rules, the evidence, typical results and why patience pays. - Related: [Multi-Timeframe Analysis](https://learn.tradelabsai.com/price-action/multi-timeframe-analysis/): Multi-timeframe analysis uses a higher timeframe for direction and a lower one for entries. Learn a simple three timeframe method, ratios and common pitfalls. - Related: [Static vs Dynamic Levels](https://learn.tradelabsai.com/price-action/static-vs-dynamic-levels/): Static levels are fixed horizontal prices; dynamic levels move with price, like moving averages and trend lines. Learn how each works and when to use them.