Ichimoku Cloud

Ichimoku Kinko Hyo is a comprehensive indicator that defines support and resistance, identifies trend direction, gauges momentum and provides trading signals.

Usage

Use as a complete trend system providing support, resistance, momentum, and cloud-based bias in a single indicator. The Kumo cloud thickness indicates trend strength.

Background

Ichimoku Kinko Hyo was developed by Goichi Hosoda in the 1960s. The system comprises five components: Tenkan-sen (9-period midpoint), Kijun-sen (26-period midpoint), Senkou Span A and B (cloud), and Chikou Span (lagged close). Price above the cloud is bullish; the cloud thickness quantifies the strength of support or resistance. — Ichimoku Charts, Nicole Elliott

Parameters

• tenkan_period (default: 9): Tenkan-sen period
• kijun_period (default: 26): Kijun-sen period
• senkou_span_b_period (default: 52): Senkou Span B period

Formula

[ \text{Tenkan-sen} = \frac{\text{Highest High} + \text{Lowest Low}}{2} \text{ for past 9 periods} ]

Source