Ichimoku Cloud

Ichimoku Cloud is a technical indicator that helps identify trend direction and potential support and resistance zones in the market.

How It Works

The core feature of the indicator is the Kumo cloud, built between two lines: Span A and Span B. The cloud is shifted 26 periods forward, displaying potential support and resistance zones in the future.

The indicator includes the following components:

1. Tenkan-sen (Conversion Line) — the average price over the last 9 periods. A fast signal line reflecting short-term momentum.
2. Kijun-sen (Base Line) — the average price over the last 26 periods. A slow line showing the medium-term trend.
3. Senkou Span A — the average of Tenkan-sen and Kijun-sen, shifted 26 periods forward. Forms one boundary of the cloud.
4. Senkou Span B — the average price over the last 52 periods, shifted 26 periods forward. Forms the second boundary of the cloud.
5. Chikou Span (Lagging Span) — the current closing price shifted 26 periods back. Used to confirm the trend.

Senkou Span A formula:

Span A = (Tenkan-sen + Kijun-sen) / 2, shift +26 periods

Senkou Span B formula:

Span B = (MAX High over 52 periods + MIN Low over 52 periods) / 2, shift +26 periods

Note

Default settings: Conversion Line Length = 9, Base Line Length = 26, Leading Span B Length = 52, Lagging Span = 26.

Limitations

• The calculation always accounts for the 26-period shift of Senkou Span — this is critical for the correct operation of the “Confirmation” and “Color Change” signals.
• The indicator works best on trending markets; in sideways (flat) conditions, false signals are possible.
• For reliable signals, it is recommended to use timeframes of 1 hour and above.

Examples

Example 1 — Kumo Breakout (bullish signal)

Bitcoin is trading at $42,000. The upper cloud boundary (max of Span A and Span B) is at $41,500, the lower at $40,000. Condition: close ($42,000) > high of the last cloud boundary ($41,500) Result: the bot receives an upward signal and opens a long position, interpreting the cloud breakout as the beginning of an uptrend.

### Example 2 — Cloud Color Change (bearish signal)

On the 4-hour ETH/USDT chart, Span A crosses Span B downward: Span A drops from $2,200 to $2,050, while Span B remains at $2,100. Condition: Span A ($2,050) < Span B ($2,100) — a crossover has occurred Result: the bot receives a downward signal, the cloud changes color from green to red, signaling a trend reversal.

Impact on Strategy

The Ichimoku Cloud provides a comprehensive market picture within a single indicator: it simultaneously shows the current trend, dynamic support/resistance, and historical context through the Lagging Span. This allows building multi-layered strategies by combining several indicator components to filter signals. Flexible components (Span A, Span B, Lagging Span) can be combined with other platform indicators to create custom entry and exit rules. For example, confirming a position through the Lagging Span combined with RSI or volume indicators significantly reduces the number of false signals.

Important

The Ichimoku Cloud is a lagging indicator. In volatile markets or during sharp price movements, signals may arrive with a delay. It is always recommended to use risk management tools (stop-loss) alongside this indicator.

Summary

Use Ichimoku Cloud: Kumo Breakout when:

• A clear signal upon breaking a key resistance/support level is needed.
• The strategy is focused on trend trading with a late but reliable entry.

Use Ichimoku Cloud: Color Change when:

• It is important to track a trend reversal at an early stage.
• Suitable for medium-term strategies with more frequent signals.

Use Ichimoku Cloud: Lagging Span Confirmation when:

• A conservative entry is needed only when the price is clearly above or below the entire cloud.
• Minimizing false signals is more important than entry frequency.

Final recommendation: combine all three signal variants or supplement them with flexible components (Span A, Span B, Lagging Span) to build multi-layered strategies with high filtering accuracy.

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Ichimoku and Flexible Indicators

In addition to the ready-made trend variants, three Ichimoku Cloud components are available as standalone indicators on the platform for flexible strategy customization.

Ichimoku Cloud Span A

Senkou Span A is the fast cloud boundary, calculated as the average of Tenkan-sen and Kijun-sen, shifted 26 periods forward.

• Usage: defines dynamic support (in an uptrend) or resistance (in a downtrend).
• In a strategy: when the price crosses the Span A level, it signals a short-term direction change. Can be used as a trigger for entering or exiting a position.

Ichimoku Cloud Span B

Senkou Span B is the slow cloud boundary, calculated as the average of the high and low over 52 periods, shifted 26 periods forward.

• Usage: a stronger support/resistance level compared to Span A. A wide cloud between Span A and Span B indicates a strong trend.
• In a strategy: a price bounce from Span B confirms trend continuation; a breakout of Span B signals its end. The distance between Span A and Span B indicates the strength of the current trend.

Ichimoku Cloud Lagging Span

Chikou Span (Lagging Span) is the current closing price displayed on the chart with a 26-period lag.

• Usage: confirms the current trend by comparing the current price with historical data. If the Lagging Span is above historical prices — the trend is bullish; below — bearish.
• In a strategy: used as a filter to confirm signals from other components. Opening a position when the Lagging Span signal coincides with Span A/B signals significantly increases strategy reliability.

Tip

To get started with the indicator, try the “Ichimoku Cloud: Confirmation” variant — it produces the most conservative and reliable signals, suitable for most trading pairs.