A Japanese-born system that reads price, time, and trend in a single glance. Five lines and a cloud, designed to make the market's equilibrium visible at once.
Ichimoku Kinko Hyo — literally "one-glance equilibrium chart" — was developed in Japan in the late 1930s by Goichi Hosoda, a newspaper writer who published his work under the pen name Ichimoku Sanjin. He is said to have employed a team of assistants over several years to refine the system before releasing it.
The intent is in the name. Where most indicators isolate a single facet of price, Ichimoku attempts to render the market's equilibrium — direction, support, resistance, momentum, and continuation — in a single image. It treats both price and time as inputs, and arranges five lines and one shaded band so that the position of the market can be read in a glance. It is less an indicator than a self-contained trading framework.
Five lines and one band (the cloud). The classic parameters are 9, 26, and 52.
Formula
Tenkan-sen (Conversion Line) = (9-period high + 9-period low) / 2
Kijun-sen (Base Line) = (26-period high + 26-period low) / 2
Senkou Span A = (Tenkan-sen + Kijun-sen) / 2, plotted 26 periods ahead
Senkou Span B = (52-period high + 52-period low) / 2, plotted 26 periods ahead
Chikou Span (Lagging Line) = today's close, plotted 26 periods behind
Note that the lines are not averages of closing price. They are midpoints of the period's high-low range. A moving average tracks the average traded level; Ichimoku tracks the midpoint between the period's extremes — the price at which the period's swing was balanced. The premise of the math is different.
The cloud (Kumo) is the shaded region between Senkou Span A and B. When A is above B, the cloud is bullish; when A is below B, it is bearish. The cloud is always shifted 26 periods into the future.
How to Read
OANDA:USDJPY
The headline composite signal of Ichimoku is sanyaku ("three roles"). A bullish triple requires all three of the following at once:
Only when all three align does the system consider a full-size position justified. The bearish triple is the mirror image. The framework explicitly refuses to act on a single crossover — its caution is part of its design.
The cloud is a band of past consensus, drawn 26 periods forward. It visualises how earlier equilibrium will likely act on future price.
Tenkan-sen (9-period midpoint) tracks short-term momentum; Kijun-sen (26-period midpoint) tracks medium-term equilibrium.
Kijun-sen behaves much like a medium-term moving average in practice: it tends to attract price during a trend, and it often holds as psychological support or resistance.
The Chikou Span plots today's close 26 periods behind. Strange at first sight — but it is a direct comparison between now and the market of 26 periods ago.
Anyone who bought 26 periods ago is, right now, either in profit or in loss. The Chikou Span shows that directly.
| Parameters | Use case |
|---|---|
| 9, 26, 52 (standard) | Hosoda's originals. From a six-day trading week: roughly 1.5 weeks, 1 month, 2 months |
| 7, 22, 44 | Modern adjustment for a five-day trading week. Common in FX |
| 12, 24, 120 | An aggressive extension used by some traders on crypto / 24-hour markets |
Related Studies
Moving Average
The most fundamental trend indicator. Moving averages smooth out price data to visually reveal the direction of a trend.
MACD (Moving Average Convergence Divergence)
A trend oscillator that graphs the 'difference' between two moving averages. Signal crosses, the zero line, divergence — how it works, and the lag trap everyone falls into.
Trend Lines & Channels
The simplest tool and the most misused. How to draw trend lines correctly, what makes them valid, how to judge a break, and the trap of discretion.