Ichimoku Cloud

AAA

DEFINITION of 'Ichimoku Cloud'

A chart used in technical analysis that shows support and resistance, and momentum and trend directions for a security or investment. It is designed to provide relevant information at a glance using moving averages (tenkan-sen and kijun-sen) to show bullish and bearish crossover points. The "clouds" (kumo, in Japanese) are formed between spans of the average of the tenkan-sen and kijun-sen plotted six months ahead (senkou span B), and of the midpoint of the 52-week high and low (senkou span B) plotted six months ahead.




INVESTOPEDIA EXPLAINS 'Ichimoku Cloud'

The ichimoku cloud was developed by Goichi Hosoda, a Japanese journalist, and published in the late 1960s. It provides more data points than the standard candlestick chart.


The overall trend is up when prices are above the cloud, down when prices are below the cloud and flat when they are in the cloud itself. When senkou span A is rising above senkou span B the trend is stronger upward, and is typically colored green. When senkou span B rises above senkou span A, the trend is stronger downward and is denoted with a red-colored cloud.

RELATED TERMS
  1. Senkou Span B

    A component of the Ichimoku Kinko Hyo indicator that is used ...
  2. Ichimoku Kinko Hyo

    A technical indicator that is used to gauge momentum along with ...
  3. Tenkan-Sen

    The mid-point between the highest high and lowest low of a particular ...
  4. Kijun-Sen

    A component of the Ichimoku Kinko Hyo indicator that is primarily ...
  5. Chikou Span

    A component of the Ichimoku Kinko Hyo indicator that is created ...
  6. Senkou Span A

    A component of the Ichimoku Kinko Hyo indicator that is used ...
Related Articles
  1. Dragons, Samurai Warriors And Sushi ...
    Bonds & Fixed Income

    Dragons, Samurai Warriors And Sushi ...

  2. An Introduction To Ichimoku Charts In ...
    Forex Education

    An Introduction To Ichimoku Charts In ...

  3. A Glance At An Equilibrium Chart
    Forex Education

    A Glance At An Equilibrium Chart

  4. Day Trading Strategy Steps
    Trading Strategies

    Day Trading Strategy Steps

comments powered by Disqus
Hot Definitions
  1. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  2. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  3. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  4. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  5. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
  6. Earnings Before Interest After Taxes - EBIAT

    A financial measure that is an indicator of a company's operating performance. EBIAT, which is equivalent to after-tax EBIT ...
Trading Center