Ichimoku Cloud explained: Tenkan, Kijun, Kumo and Chikou for beginners
What is the Ichimoku Cloud?
The Ichimoku Cloud, full name Ichimoku Kinko Hyo ("one-glance equilibrium chart"), is a complete trend system developed by Japanese journalist Goichi Hosoda and published in the late 1960s. It plots five lines that together show trend, momentum, support and resistance in one view.
At first it looks crowded. Once you know what each line is, the Ichimoku Cloud becomes quick to read: is price above, below or inside the cloud, and what are the nearest support and resistance lines? Unlike moving averages, which average closes, every Ichimoku line except Chikou is a midpoint of the high and low over a period, which makes the lines flat when price ranges and step when it breaks out.
Kijun-sen (base) = (26-period high + 26-period low) ÷ 2
Senkou Span A = (Tenkan + Kijun) ÷ 2, plotted 26 periods ahead
Senkou Span B = (52-period high + 52-period low) ÷ 2, plotted 26 periods ahead
Chikou Span = close, plotted 26 periods back
The five Ichimoku lines, one by one
Tenkan-sen (conversion line)
The midpoint of the last 9 periods. It is the fastest line and shows short-term balance. When it is flat, price is rotating in a short range.
Kijun-sen (base line)
The midpoint of the last 26 periods. It acts like a medium-term equilibrium. Price often pulls back to the Kijun in trends, and a flat Kijun can work as a magnet.
Senkou Span A and B (the cloud, or Kumo)
Span A is the average of Tenkan and Kijun; Span B is the 52-period midpoint. Both are shifted 26 periods into the future. The space between them is shaded and called the Kumo. When Span A is above Span B, the cloud is usually coloured as bullish; when below, bearish.
Chikou Span (lagging line)
The current close plotted 26 periods back. It compares today's price with price 26 periods ago. Chikou above past price is a sign of upward strength; below, downward.
How to read the Ichimoku Cloud
- Price above the cloud: up-trend reading. The cloud below acts as a support zone.
- Price below the cloud: down-trend reading. The cloud above acts as resistance.
- Price inside the cloud: no clear trend; equilibrium and chop.
- Cloud thickness: a thick cloud is a stronger support or resistance zone than a thin one.
- Future cloud: because the spans are plotted ahead, the cloud's colour 26 periods out hints at the direction of the developing balance.
Tenkan-Kijun cross
Tenkan crossing above Kijun shows short-term momentum turning up; crossing below shows it turning down. Crosses above the cloud are considered stronger than crosses inside or below it.
Ichimoku settings for NIFTY intraday
The standard settings are 9, 26, 52. They came from the old six-day Japanese trading week (9 ≈ one and a half weeks, 26 ≈ one month, 52 ≈ two months). Many traders still use them unchanged because so many others do.
| Setting | Use |
|---|---|
| 9, 26, 52 | Default; daily and 15-minute charts |
| 9, 26, 52 on 5-minute | Works, but the cloud then covers about two hours of NIFTY's 75-candle session |
| 7, 22, 44 or 10, 30, 60 | Variations some intraday traders test |
On a 5-minute chart the 52-period Span B looks back over more than half a session, so the first hour of the day is heavily influenced by the previous afternoon. Some traders prefer the 15-minute Ichimoku for context and a 5-minute chart for timing.
Ichimoku strategy ideas (educational)
1. Trend with the cloud
Only study long setups while price is above the cloud and Chikou is above past price, and short setups when both are below. This keeps you on the side of the bigger balance.
2. Kijun pullbacks
In an established trend, pullbacks often stall near the Kijun-sen. Traders watch for price to test a flat or rising Kijun and hold above it.
3. Kumo breakout
When price leaves a long period inside a thin cloud and closes beyond it, a new trend may be starting. Confirm it with breakout vs fakeout clues such as volume.
4. Flat lines as levels
A flat Kijun or flat Span B marks a price where the high-low midpoint has not changed for many periods. These flat stretches often act as key levels.
Strong vs weak Ichimoku readings
A strong reading has everything aligned: price above the cloud, Tenkan above Kijun, Chikou above price 26 periods back, and a bullish future cloud. A weak reading has mixed signals, for example a Tenkan-Kijun cross inside a thick cloud.
Ichimoku struggles in tight ranges, where price weaves in and out of a thin cloud and every line is flat. In that state the system is telling you "equilibrium": better to wait than to force a trend read. Checking ADX can confirm whether a trend exists at all.
Combining Ichimoku with volume and footprint
Ichimoku is built entirely from price highs, lows and closes. Volume adds the missing piece. When price tests the top of the cloud from above, a footprint chart can show whether buyers step in with positive delta or whether sellers push through. A cloud boundary that lines up with a volume profile high volume node is a stronger zone than either alone.
Worked NIFTY example (illustration)
Illustration with plausible numbers on a 15-minute NIFTY chart. For two sessions price has been inside a thin cloud between 24,080 and 24,120. On the third morning NIFTY opens at 24,140 and holds above the cloud. Tenkan crosses above Kijun at 24,130 and Chikou moves above the price of 26 candles earlier.
By midday NIFTY pulls back to 24,150, where the Kijun-sen has been flat for several candles, and holds. A trader studying this would note that a close back inside the cloud below 24,120 would cancel the trend reading. Trading F&O carries a high risk of loss; this example is only to show how the lines line up.
Common Ichimoku mistakes
- Using every line as a separate trigger instead of reading them together.
- Forgetting that the cloud is shifted 26 periods forward.
- Trading Tenkan-Kijun crosses inside the cloud.
- Applying daily-chart logic directly to 1-minute charts.
- Changing settings constantly; the default's popularity is part of why it works as a reference.
Seeing it on the TradingMarble chart
On the TradingMarble chart you can plot the Ichimoku Cloud on NIFTY, BANKNIFTY and F&O charts and set its periods. Seeing it beside the footprint and volume profile helps you study how price reacts at cloud edges and flat Kijun levels. See the features page.
Ichimoku Cloud checklist
- Is price above, below or inside the cloud?
- Is Tenkan above or below Kijun?
- Is Chikou above or below past price?
- What colour is the future cloud?
- Where are the nearest flat lines and cloud edges?
- Does volume confirm the reaction at those levels?
Read as one picture, the Ichimoku Cloud gives trend, levels and momentum at a glance.
Frequently asked questions
What is the Ichimoku Cloud in simple words?
The Ichimoku Cloud is a trend indicator with five lines based on midpoints of past highs and lows. The shaded cloud, called the Kumo, shows support and resistance zones. Price above the cloud suggests an up-trend, below suggests a down-trend, and inside suggests no clear trend.
What are the best Ichimoku settings for intraday?
The default 9, 26, 52 is widely used, including on 15-minute NIFTY charts. On 5-minute charts it still works, but the cloud then reflects more than half a session. Some intraday traders test shorter settings like 7, 22, 44, but the default remains the common reference.
What is the difference between Tenkan-sen and Kijun-sen?
Tenkan-sen is the 9-period high-low midpoint and reacts quickly. Kijun-sen is the 26-period midpoint and is slower, acting as a medium-term equilibrium. A Tenkan crossing above Kijun shows short-term momentum turning up, and the reverse shows it turning down.
What does the Chikou Span show?
The Chikou Span is today's close plotted 26 periods back. It lets you compare current price with price 26 periods ago. When Chikou is above that past price, momentum favours buyers; when it is below, it favours sellers.
Why is the Ichimoku Cloud shifted forward?
Senkou Span A and B are plotted 26 periods ahead so that today's calculation forms a zone that future price will meet. This gives a projected support or resistance area and a view of how the balance between buyers and sellers is developing.
Does Ichimoku work in sideways markets?
Not well. In ranges price moves in and out of a thin cloud and the lines go flat, producing mixed readings. Ichimoku is designed for trending markets, so many traders check ADX or simply wait when price is inside the cloud.