Ichimoku Kinko Hyo means "one glance equilibrium chart". It looks scary. It's actually friendly once you meet each line.
| Line | What it is | Default |
|---|---|---|
| Tenkan-sen (conversion) | Midpoint of last 9 periods | Fast line |
| Kijun-sen (base) | Midpoint of last 26 periods | Slow line |
| Senkou Span A | Average of Tenkan and Kijun, shifted 26 ahead | Cloud edge |
| Senkou Span B | Midpoint of last 52, shifted 26 ahead | Cloud edge |
| Chikou Span | Close shifted 26 back | Confirmation |
The simple rules
- Price above the cloud: bullish. Below: bearish. Inside: no man's land.
- Tenkan crossing above Kijun: bullish signal (stronger above the cloud).
- The cloud acts as support or resistance. Thick cloud = strong.
Wick says
Five lines and a cloud sounds like a weather forecast. But "price above a green cloud" is one of the cleanest trend signals around.
Key takeaways
- Above the cloud = bullish bias; below = bearish.
- Tenkan/Kijun crosses give entries.
- The cloud is support/resistance projected into the future.