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Overview
The Ichimoku Cloud (Ichimoku Kinko Hyo) is a comprehensive technical indicator developed by Japanese journalist Goichi Hosoda in the 1960s. Unlike most indicators that provide a single line of information, Ichimoku delivers trend direction, momentum, support and resistance levels, and even future price projections β all in one view.
The indicator consists of five components: the Tenkan-sen (conversion line, 9-period midpoint), Kijun-sen (base line, 26-period midpoint), Senkou Span A (average of Tenkan and Kijun, plotted 26 periods forward), Senkou Span B (52-period midpoint, plotted 26 periods forward), and the Chikou Span (current close plotted 26 periods back). The area between Span A and Span B forms the "cloud" (Kumo).
A bullish signal occurs when price is above the cloud, the Tenkan-sen is above the Kijun-sen, and the cloud ahead is bullish (Span A > Span B). A bearish signal is the mirror image. The cloud acts as dynamic support and resistance: a thin cloud is easily penetrated; a thick cloud represents strong support or resistance.
The Chikou Span β current price projected back in time β provides a final confirmation: it should be above past price action for a bullish signal, confirming that current momentum is genuinely strong.
Strategy Code
This is a TradingView Pine Script strategy example for this page concept. Paste it into the TradingView Pine Editor, add it to your chart, and run it in the Strategy Tester.
//@version=6
strategy("Ichimoku Cloud Strategy", overlay=true)
conv = (ta.highest(high, 9) + ta.lowest(low, 9)) / 2
base = (ta.highest(high, 26) + ta.lowest(low, 26)) / 2
spanA = (conv + base) / 2This is a thinkorswim ThinkScript strategy example for this page concept. Open thinkorswim, create a custom strategy, paste the script, and apply it to your chart.
def conv = (Highest(high, 9) + Lowest(low, 9)) / 2;
def base = (Highest(high, 26) + Lowest(low, 26)) / 2;
def spanA = (conv + base) / 2;
def spanB = (Highest(high, 52) + Lowest(low, 52)) / 2;
def buySignal = close > Max(spanA, spanB) and conv > base;Join thousands of traders who use auto-Trading to execute this strategy automatically, 24/7.
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