Ichimoku Kinko Hyo — in Japanese, it translates to "equilibrium chart at a glance." It was developed by Goichi Hosoda in the 1960s. It is not just an indicator, but a complete trading system that on a single chart:
- Shows the trend
- Provides support/resistance
- Measures momentum
- Provides entry/exit signals
📊 Complexity Level: Ichimoku is an advanced indicator, but once understood, it is extremely powerful.
1. Tenkan-sen (Conversion Line) — Red Line
- Formula: (9-period High + 9-period Low) / 2
- Short-term momentum indicator
- Price above it → Short-term Bullish
- Acts like a quick signal line
2. Kijun-sen (Base Line) — Blue Line
- Formula: (26-period High + 26-period Low) / 2
- Medium-term momentum indicator
- Strong support/resistance level
- Price above it → Medium-term Bullish
- Most important reference line
3. Senkou Span A (Leading Span A) — Cloud Boundary 1
- Formula: (Tenkan-sen + Kijun-sen) / 2 — plotted 26 periods ahead
- Faster cloud boundary
4. Senkou Span B (Leading Span B) — Cloud Boundary 2
- Formula: (52-period High + 52-period Low) / 2 — plotted 26 periods ahead
- Slower cloud boundary
5. Chikou Span (Lagging Span) — Green Line
- Current closing price plotted 26 periods in the past
- Confirmation line — validates the overall direction of the trend
The area between Span A and Span B = Kumo (Cloud)
| Green Cloud (Span A > Span B) | Bullish trend |
| Red Cloud (Span B > Span A) | Bearish trend |
| Thick Cloud | Strong support/resistance |
| Thin Cloud | Weak support/resistance — easy to break |
| Price above Cloud | Bullish |
| Price below Cloud | Bearish |
| Price inside Cloud | Neutral/Choppy — Avoid trading |
Signal 1: TK Cross (Most Common)
Bullish TK Cross (BUY):
- Tenkan-sen (Red) crosses above Kijun-sen (Blue)
- Especially powerful if it happens above the Cloud
Bearish TK Cross (SELL):
- Tenkan-sen crosses below Kijun-sen
- Especially powerful if it happens below the Cloud
Signal 2: Kumo Breakout
Bullish Breakout:
- Price was below the Cloud (Bearish)
- Price broke through the Cloud and moved upward
- Cloud turned green → Strong BUY signal
Bearish Breakdown:
- Price was above the Cloud (Bullish)
- Price broke through the Cloud and moved downward
- Cloud turned red → Strong SELL signal
Signal 3: Kijun-sen Bounce
Kijun-sen (Base Line) is a strong dynamic support/resistance:
- In an uptrend, if price touches Kijun and bounces → BUY
- In a downtrend, if price touches Kijun and gets rejected → SELL
Signal 4: Chikou Span Confirmation
- Chikou Span (current price, plotted 26 periods behind) is above the price → Bullish confirmation
- Chikou Span is below the price → Bearish confirmation
- Always confirm with Chikou alongside the TK Cross or Cloud signal
Perfect Bullish Setup (All 5 Checks):
When all 5 conditions match → Very High Probability BUY
Entry Strategy:
- Aggressive: Entry on TK Cross
- Conservative: Entry on Kijun bounce (safer)
- Stop Loss: Below Kijun (Bullish setup)
- Target: Next Kumo boundary or previous high
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Ichimoku Settings — Standard vs Crypto
| Tenkan Period | 9 | 20 |
| Kijun Period | 26 | 60 |
| Span B Period | 52 | 120 |
| Displacement | 26 | 30 |
Why do they need to be changed? Japanese markets trade 6 days/week, so standard settings are based on that. Crypto trades 7 days a week — therefore, adjusted settings yield more accurate results.
Q1. Is Ichimoku suitable for beginners?
Ichimoku seems a bit complex at first, but once understood, it is a very powerful and complete system. First, understand Kumo and TK Cross.
Q2. On which timeframe does Ichimoku work best?
Ichimoku is most reliable on the Daily (1D) chart. Weekly can also be used for long-term analysis.
Q3. Which indicators should be used with Ichimoku?
Ichimoku is already a complete system. If you want to add anything, add only Volume — it provides confirmation.
Q4. What to do if the price is inside the Cloud?
Being inside the cloud is a sign of choppy and uncertain market conditions — Avoid trading until the price moves out of the Cloud.
Ichimoku Cloud is a complete trading system:
- ✅ Trend, momentum, support/resistance — all in one chart
- ✅ Also shows future support/resistance (26 periods ahead)
- ✅ Confirmation is obtained from multiple signal types
- ❌ Seems complex at first — must be learned with patience
⚠️ Disclaimer: Educational content only. Trading involves risk.
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