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"One glance equilibrium chart" - a complete trading system showing trend, momentum, support/resistance in one view
Ichimoku Kinko Hyo ("one glance equilibrium chart") is a complete trading system developed by Japanese journalist Goichi Hosoda over 30 years. It shows trend direction, momentum, and support/resistance levels all in one view.
Why it's powerful: Instead of using multiple indicators, Ichimoku gives you everything at once. The "cloud" (Kumo) provides dynamic support/resistance, while the various lines signal momentum shifts and trend changes.
It looks complex at first, but once you understand the five components, it becomes an incredibly efficient way to analyze markets.
9-period midpoint. Fast line showing short-term momentum. Similar to a fast MA.
26-period midpoint. Slow line showing medium-term trend. Key support/resistance.
Midpoint of Tenkan/Kijun, plotted 26 periods ahead. Forms one edge of the cloud.
52-period midpoint, plotted 26 periods ahead. Forms the other edge of the cloud.
Current close plotted 26 periods back. Confirms trend by comparing current price to historical price action.
Bullish trend. Cloud acts as support below. Green cloud (Span A > Span B) = stronger bullish signal.
Bearish trend. Cloud acts as resistance above. Red cloud (Span B > Span A) = stronger bearish signal.
Potential trend change. Cloud provides resistance - wait for clean break above for confirmation.
Trend weakening. Cloud provides support - watch for breakdown below for bearish confirmation.
Ichimoku looks complex but boils down to one question: is price above or below the cloud? Above = bullish, below = bearish, inside = no trade. Start there before worrying about TK crosses and Chikou span.
Indicators confirm what price action shows. They don't replace it. Never trade based on an indicator signal alone. Always combine with chart structure, pattern recognition, and volume analysis.
The Academy teaches when to use this indicator, when to ignore it, and how to combine it for high-probability setups.
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