Ichimoku Kinko Hyo (Ichimoku Cloud)
Developed by Goichi Hosoda · 1936
Quick Answer
Ichimoku Kinko Hyo — often translated as "one glance equilibrium chart" — is a comprehensive Japanese trend system developed by Tokyo newspaper writer Goichi Hosoda in the late 1930s. Hosoda worked on the system for over three decades before publishing it in 1969, aiming to give a complete snapshot of trend, momentum, and support/resistance in a single glance.
What is the Ichimoku Kinko Hyo?
Ichimoku Kinko Hyo — often translated as "one glance equilibrium chart" — is a comprehensive Japanese trend system developed by Tokyo newspaper writer Goichi Hosoda in the late 1930s. Hosoda worked on the system for over three decades before publishing it in 1969, aiming to give a complete snapshot of trend, momentum, and support/resistance in a single glance. The system combines five lines: Tenkan-sen (Conversion Line), Kijun-sen (Base Line), Senkou Span A and B (which form the "Cloud" or Kumo), and Chikou Span (Lagging Span). Unlike Western indicators that focus on a single dimension, Ichimoku blends trend, momentum, and time into one integrated framework — which is why serious Japanese traders and forex professionals rely on it to this day.
How It Works
The Tenkan-sen is a 9-period midpoint line, the Kijun-sen a 26-period midpoint, and their crossover produces fast trend signals similar to a moving average cross. The Senkou Span A is the average of Tenkan and Kijun projected 26 periods ahead, while Senkou Span B is the 52-period midpoint also projected forward. The space between them forms the Cloud — a dynamic support and resistance zone that reflects where price is likely to find equilibrium. Price trading above the cloud is bullish, below is bearish, and inside signals a neutral or transitioning market. The Chikou Span is the current close plotted 26 periods back, used to confirm trend direction. A complete Ichimoku buy signal requires the tenkan to be above the kijun, price to be above the cloud, a thick bullish cloud ahead, and the chikou above past price.
Formula
Tenkan-sen = (9-period High + 9-period Low) / 2
Kijun-sen = (26-period High + 26-period Low) / 2
Senkou Span A = (Tenkan-sen + Kijun-sen) / 2, shifted 26 periods forward
Senkou Span B = (52-period High + 52-period Low) / 2, shifted 26 periods forward
Chikou Span = Current Close shifted 26 periods backHow to Read the Ichimoku Cloud
- 1Price above cloud: bullish market structure
- 2Price below cloud: bearish market structure
- 3Price inside cloud: neutral, no trade zone for most traders
- 4Tenkan crosses above Kijun inside/above cloud: bullish momentum
- 5Tenkan crosses below Kijun inside/below cloud: bearish momentum
- 6Thick cloud = strong support/resistance ahead
- 7Thin cloud = weak support/resistance, breakouts more likely
- 8Chikou span clear of past price confirms the trend
Strengths and Weaknesses
Strengths
- +Provides trend, momentum, and S/R in one indicator
- +Forward-projected cloud offers unique predictive S/R
- +Excellent filter for false breakouts
- +Works across all asset classes
- +Ideal for trend-following systems and position trading
Weaknesses
- −Visually complex — intimidating for beginners
- −Multiple signals can conflict without clear hierarchy
- −Based on 9/26/52 defaults calibrated for 1930s Japanese markets
- −Lagging by design — poor for scalping
- −Requires patience — fewer signals than simpler oscillators
Best Timeframes
4H, daily, and weekly charts are optimal. The system was designed for longer swings and tends to produce too much noise on sub-hourly timeframes.
Best for: Trend-following strategies on 1H and higher timeframes. Excellent on daily and weekly charts for position traders looking for high-conviction directional setups.
Example Strategy
Ichimoku Trend Pullback: On the daily chart, identify instruments where price is clearly above the cloud and the cloud ahead is bullish (Senkou A > Senkou B). Wait for price to pull back to the Tenkan-sen or Kijun-sen line. Enter long on a bullish reversal candle at that line with a stop below the Kijun. Target the prior high for a first scale and trail the stop along the Kijun for the runner. Skip any setup where the chikou span is still inside past price.
This example is educational, not financial advice. Always backtest any strategy and manage risk with appropriate position sizing.
Related Indicators
Brokers That Offer the Ichimoku Cloud
Any broker with MetaTrader 4, MetaTrader 5, or cTrader supports the Ichimoku Cloud as a standard indicator. Below are our top EU-regulated picks.
Frequently Asked Questions
What is the Ichimoku Kinko Hyo (Ichimoku Cloud)?
Ichimoku Kinko Hyo — often translated as "one glance equilibrium chart" — is a comprehensive Japanese trend system developed by Tokyo newspaper writer Goichi Hosoda in the late 1930s. Hosoda worked on the system for over three decades before publishing it in 1969, aiming to give a complete snapshot of trend, momentum, and support/resistance in a single glance. The system combines five lines: Tenkan-sen (Conversion Line), Kijun-sen (Base Line), Senkou Span A and B (which form the "Cloud" or Kumo), and Chikou Span (Lagging Span). Unlike Western indicators that focus on a single dimension, Ichimoku blends trend, momentum, and time into one integrated framework — which is why serious Japanese traders and forex professionals rely on it to this day.
Who developed the Ichimoku Cloud?
Ichimoku Cloud was developed by Goichi Hosoda in 1936.
What is the formula for the Ichimoku Cloud?
Tenkan-sen = (9-period High + 9-period Low) / 2 Kijun-sen = (26-period High + 26-period Low) / 2 Senkou Span A = (Tenkan-sen + Kijun-sen) / 2, shifted 26 periods forward Senkou Span B = (52-period High + 52-period Low) / 2, shifted 26 periods forward Chikou Span = Current Close shifted 26 periods back
What timeframes work best with Ichimoku Cloud?
4H, daily, and weekly charts are optimal. The system was designed for longer swings and tends to produce too much noise on sub-hourly timeframes.
What is Ichimoku Cloud best used for?
Trend-following strategies on 1H and higher timeframes. Excellent on daily and weekly charts for position traders looking for high-conviction directional setups.