What is the Ichimoku Cloud and how to use it in trading đŻ
Ichimoku Cloud is a trading indicator that helps you see trend direction, momentum, and potential support/resistance â all in one chart. It may look confusing at first, there are many lines, but it becomes intuitive once you break it down. The indicator consists of five key lines đ
âșTenkan-sen (Conversion Line): short-term trend, calculated over the last 9 periods (example: if you use 1-day time frame, it means over the last 9 days). It reacts quickly to price moves.
âșKijun-sen (Base Line): medium-term trend, based on the last 26 periods. Used as support/resistance and for trend confirmation.
âșSenkou Span A: average of Tenkan and Kijun, projected 26 periods ahead. Forms one edge of the cloud.
âșSenkou Span B: 52-period average, projected 26 periods ahead. Forms the other edge of the cloud.
âșChikou Span (Lagging Line): current price, plotted 26 periods back. Used for confirmation.
âïž The area between Span A and B is the âcloudâ â it shows future support or resistance. If price is above the cloud, the market is in an uptrend. If it's below, itâs a downtrend. Inside the cloud = indecision.
You need to look for crossovers like Tenkan above Kijun for bullish signals. A bullish signal above the cloud is strong. A bearish signal below the cloud is also strong.
đ Ichimoku works best on trending markets and higher timeframes like 1D or 1W. It helps avoid fakeouts and stay in profitable positions longer by filtering out short-term noise.
