Technical & Chart AnalysisIchimokuIchimoku Cloud
Ichimoku Kinko Hyo
A Japanese five-line system that shows trend, support, resistance and momentum in a single chart overlay.
What Ichimoku Kinko Hyo means
Ichimoku Kinko Hyo, developed by journalist Goichi Hosoda, is a five-line system designed to convey trend, support, resistance and momentum at a glance. Tenkan-sen is the midpoint of the highest high and lowest low over 9 periods, Kijun-sen the same calculation over 26 periods. Senkou Span A is the average of those two lines and Senkou Span B the 52-period midpoint, both plotted 26 periods into the future, and the shaded area between them forms the cloud, or Kumo. Chikou Span is the current close plotted 26 periods back.
Interpretation is holistic rather than signal by signal. Price above the cloud is read as bullish, a Tenkan crossing above Kijun as a momentum trigger, the cloud itself as forward-projected support or resistance whose thickness indicates how firm it should be, and Chikou Span clear of past price as confirmation. The default 9, 26 and 52 settings derive from the old six-day Japanese trading week. The drawbacks are that the overlay is visually dense and that, being built from midpoints of past ranges, it lags in fast reversals.
Worked example
On EUR/USD a 9-period high of 1.0900 and low of 1.0800 put Tenkan-sen at 1.0850, while a 26-period high of 1.0950 and low of 1.0710 put Kijun-sen at 1.0830, giving a Senkou Span A of 1.0840 plotted 26 periods ahead.
Related terms
- TrendA sustained directional bias in price, conventionally defined by a sequence of higher highs and higher lows, or the reverse.
- SupportA price area where buying interest has previously been strong enough to halt or reverse a decline.
- ResistanceA price area where selling interest has previously been strong enough to stop or reverse an advance.
- Moving AverageA line that averages price over a rolling lookback window in order to smooth noise and reveal underlying direction.
- TimeframeThe amount of time each candle or bar on a chart represents, from one minute up to monthly intervals.
Frequently asked questions
What does Ichimoku Kinko Hyo mean in forex trading?
A Japanese five-line system that shows trend, support, resistance and momentum in a single chart overlay.
How does Ichimoku Kinko Hyo work in practice?
Interpretation is holistic rather than signal by signal. Price above the cloud is read as bullish, a Tenkan crossing above Kijun as a momentum trigger, the cloud itself as forward-projected support or resistance whose thickness indicates how firm it should be, and Chikou Span clear of past price as confirmation. The default 9, 26 and 52 settings derive from the old six-day Japanese trading week. The drawbacks are that the overlay is visually dense and that, being built from midpoints of past ranges, it lags in fast reversals.
What is an example of Ichimoku Kinko Hyo?
On EUR/USD a 9-period high of 1.0900 and low of 1.0800 put Tenkan-sen at 1.0850, while a 26-period high of 1.0950 and low of 1.0710 put Kijun-sen at 1.0830, giving a Senkou Span A of 1.0840 plotted 26 periods ahead.
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