Ichimoku Cloud: What It Means and How to Use It

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What Is the Ichimoku Cloud?
The Ichimoku Cloud is a collection of technical indicators that show support and resistance levels, as well as momentum and trend direction. It does this by taking multiple averages and plotting them on a chart. It also uses these figures to compute a “cloud” that attempts to forecast where the price may find support or resistance in the future.

The Ichimoku Cloud was developed by Goichi Hosoda, a Japanese journalist, and published in the late 1960s.1 It provides more data points than the standard candlestick chart. While it seems complicated at first glance, those familiar with how to read the charts often find it easy to understand with well-defined trading signals.

TradingView.
KEY TAKEAWAYS
The Ichimoku Cloud is composed of five lines or calculations, two of which comprise a cloud where the difference between the two lines is shaded in.
The lines include a nine-period average, a 26-period average, an average of those two averages, a 52-period average, and a lagging closing price line.
The cloud is a key part of the indicator. When the price is below the cloud, the trend is down. When the price is above the cloud, the trend is up.
The above trend signals are strengthened if the cloud is moving in the same direction as the price. For example, during an uptrend, the top of the cloud is moving up, or during a downtrend, the bottom of the cloud is moving down.

What Does the Ichimoku Cloud Tell You?
The technical indicator shows relevant information at a glance by using averages.

The overall trend is up when the price is above the cloud, down when the price is below the cloud, and trendless or transitioning when the price is in the cloud.

When Leading Span A is rising and above Leading Span B, this helps to confirm the uptrend and the space between the lines is typically colored green. When Leading Span A is falling and below Leading Span B, this helps confirm the downtrend. The space between the lines is typically colored red in this case.

Traders will often use the Ichimoku Cloud as an area of support and resistance depending on the relative location of the price. The cloud provides support/resistance levels that can be projected into the future. This sets the Ichimoku Cloud apart from many other technical indicators that only provide support and resistance levels for the current date and time.

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The information contained here and the resources available for download through this website is not intended as, and shall not be understood or construed as, financial advice. I am not an attorney, accountant or financial advisor, nor am I holding myself out to be, and the information contained on this Website is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation.

We have done our best to ensure that the information provided here and the resources available for download are accurate and provide valuable information. Regardless of anything to the contrary, nothing available on or through this Website should be understood as a recommendation that you should not consult with a financial professional to address your particular information. The Company expressly recommends that you seek advice from a professional.

*None of this is meant to be construed as investment advice, it's for entertainment purposes only. Links above include affiliate commission or referrals. I'm part of an affiliate network and I receive compensation from partnering websites. The video is accurate as of the posting date but may not be accurate in the future.

[vsbb]

Hey arti, some tips:
If any lines of the ichimoku have a long horizontal period it is a resistance point and acts as magnet for the price (basically it points to wyckoff accumulations)
Lagging line is meant to avoid consolidation periods, if it is unimpeded it is trending. Also if the lagging line marks some levels, it also works as resistance
Usually there are 3 entry types for the cloud:
Conversion line and base line crossing - these can happen under, inside or over the cloud, if they happen in the same place as the trend it indicates a stronger signal
Cloud breakout, if the price bar that broke out of the cloud is big, it tends to be a stronger signal
Cloud reversal (when it turns red to green and vice versa), this is equivalent to a ema 20 and a ema 55 crossing most of the time, so great signal overall but should be filtered by the lagging span condition

[okeynot]

Hey! I just started working the strategy with the Arty indicator and the sessions! Yesterday made 5% !! 3 TP and 1 SL! It’s amazing!!! Thank you bro!

[gamingplaylistsp]

Ichimoku traders swear that the lagging span (chikou) line is the most important thing on the chart. In essence it displays momentum. As long as the chikou is above price bars youre confident market sentiment is still bullish and the more space the better.

[kucchals]

As always…your videos are a breath of fresh air. Easy to understand, crisp, focused and easily implemented. I especially enjoyed your atrstop video, and have designed my own MT4 indicator that does the same thing. As a committed ichimoku trader, I am also enjoying fabulous success by combining that with your Smoothed moving averages (both on a M15 and M5). Keep it up … a solid thumbs up…great job.

[paulboyd]

Thanks so much ... I have looked at itchy cloud a couple of times, it always seemed rather intriguing ... You make very good, fun and informative videos, your delivery style is relaxing and to the point.

[HereIsmarcus]

Nice one Arty. I've seen other Ichi Moku videos and nobody simply said that the cloud thickness shows the strength of that support/resistance zone. That's really useful for me to see at a glance what might be going on. Hat's off to you Arty. You're a great teacher. These days I'm always on the lookout for less cognitive load in my trading. The easier on the eye the better.

[KannanSreenivas]

GOT it. CLear, and awaiting the next video based on ICHIMOKU and your lession on how and where to enter and how to set stop loss and target. Thanks Mate

[ervonHier]

Thanks! At your Example at 8:17, if you use the lagging span too and the conversion line, the base line AND the lagging line is about/outside from the kumo cloud, it is a additional confirmation

[rollingjoker]

Thanks Arty for this..I requested it and you have done it..Thank you so much Arty..a lot of love from Kenya.

[markomladenovic]

im half way through video and im stopping by in the comments to say that i really like how you show explanation in real time

[yallprettysus]

you are really the only one Trader I watch on Youtube. I can feel your honesty and it really seems that your quest is to help and not gather mindless sheep to promote your paid channel! Thank you for this!!

[watevaweneva]

First time viewer... I definitely subscribed, you're dropping gems!!!

[jessebillson]

You are the only guy that has described this in a way I understand. Great job!!!

[stoner]

i have't seen one thumbs down on your video here at all!! all thumbs up, thats a good sign!!

[ginokappadonna]

I immediately clicked with this indicator a few years back when I first was introduced. Great content. I picked up some more ideas about entry and exit

[dino]

Great info. The only thing I'm torn about is traders saying the indicator is pushing price in a particular direction when it is actually living up to its name, indicator. Indicators don't control the price, they give an indication of what the price is doing. But as I said, it's a great video. I learned something today my day wasn't wasted

[danrocksaus]

Thanks Arty. Great intro to the Ichimoku.
Seems complex, but your explanation makes it easier to absorb. 🤘

[justynasocha]

Very clear explanation, adding to the full picture not just focusing on that indicador only. Happy to see the follow up video.

[alisqallihoussaini]

Thank you for the video, I’m using ichimoku for my trades, what can I say is that lagging span is very very very important, it s the confirmation to take a buy or sell !

[JayHennigan]

Nice video Arty - I just use the clouds as visual support resistance (and thus extra confluence).
- I do know from thorough backtesting that the Vumanchu indicator works very well with Ichimoku clouds (or red dots above 0 when ichimoku cloud is red for possible sells and green dots below 0 when ichimoku cloud is green for possible longs) - (I’m always looking for added confluences) it’s a pleasant way to get into trades - but always do your own backtesting for confidence in trading any strategy.