Analysis Techniques & Strategies

Ichimoku Cloud (Indicator)

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Important Note: To properly display the indicator on a chart, make sure that you set the Space to the Right value to 30 on the General tab of the Format Window dialog. Access from the right-click Format Window shortcut menu or using the Format > Window - General menu sequence.

Input Information

Name	Expression	Default	Description
Tenkan_Sen_Length	Numeric	9	Number of bars to be used in the calculation of the Tenkan line.
Kinjun_Sen_Length	Numeric	26	Number of bars to be used in the calculation of the Kinjun line.
Senknou_Span_B_Length	Numeric	52	Number of bars to be used in the calculation of the Senkou Span B value.
Senkou_Span_Offset	Numeric	26	Number of bars to the right of the last price bar to plot the current Senkou Span A and Senkou Span B values.
Show_Chikou_Span	True/False	True	True to plot the Chikou span line or False to not plot this line in a chart.
Chikou_Offset	Numeric	26	Number of bars back to offset the plot of the Chikou line (if shown).
Up_Cloud_Color	Numeric	RGB( 68, 141, 223 )	Color to use to fill the cloud when Senkou Span A is above Senkou Span B. Also applies to PriceLoc cell background in a grid.
Down_Cloud_Color	Numeric	RGB( 221, 111, 0 )	Color to use to fill the cloud when Senkou Span A is below Senkou Span B. Also applies to PriceLoc cell background in a grid.
Background_Up_Color	Numeric	DarkBlue	Color of cell backgrounds when plotting the string "UP" in grid applications.
Background_NewUp_Color	Numeric	Blue	Color of cell backgrounds when plotting the string "NEWUP" in grid applications.
Background_Down_Color	Numeric	DarkRed	Color of cell backgrounds when plotting the string "DOWN" in grid applications.
Background_NewDown_Color	Numeric	Red	Color of cell backgrounds when plotting the string "NEWDOWN" in grid applications.
Background_Neutral_Color	Numeric	DarkGray	Color of cell backgrounds when plotting the string "Neutral" in grid applications.

Market Synopsis

Ichimoku is a price channel based technical indicator that generates a series of lines to determine trend direction along with support and resistance levels. Originally designed for weekly charts, it can also be effective on other time frames. Developed in Japan, Ichimoku translated means; "one glance balanced chart" or "one look".

The Tenkan and Kijun lines are the trend confirmation component of the Ichimoku indicator.

Tenkan (Yellow): Highest High and Lowest Low of 9 bars, divided by 2.

Kijun (Magenta): Highest High and Lowest Low of 26 bars, divided by 2.

Typically a trader will look for crossovers of these two lines to initiate a position or confirm the trend. Tenkan above Kijun = Bullish. Tenkan below Kijun = Bearish.

Alternative Daily Chart Inputs: Tenkan(5 or 8), Kijun(21 or 22)

The Ichimoku Cloud represents historical price ranges for support and resistance levels. The difference between the two lines is called the 'Cloud'. This is the support and resistance component of the Ichimoku. A thicker cloud mitigates or compensates high volatility (e.g. it is harder for price action to penetrate the entire cloud in high volatility situations).

SenkouSpan_A (Top Cloud Line): Tenkan + Kijun divided by 2. The calculation is then plotted displaced 22 to 26 bars ahead of the current price action.

SenkouSpan_B (Bottom Cloud Line): HighestHigh and LowestLow of 52 bars divided by 2. The calculation is then plotted displaced 26 bars ahead of the current price action.

Typically a trader will look for a re-entry in the direction of the trend as prices bounce off the cloud. If prices break through the cloud, it is a good indication of a change in trend direction.

Daily Chart Inputs: SenkouSpanA (try 21 or 22), SenkouSpanB (try 42 or 44)

The Chikou line is a secondary trend confirmation.

Chikou (Cyan): a 26 bar historically displaced line of the current close.

The Chikou line above or below the cloud confirms the new trend direction. This is a simple momentum indicator.

Daily Chart Inputs: Chikou (try 20 or 22).

Plot Information

Number	Name	Default Color	Description
Plot1	Tenkan	Yellow	Plots the Tenkan Sen value.
Plot2	Kinjun	Magenta	Plots the Kinjun Sen value.
Plot3	Chikou	Cyan	Plots the Chikou Offset value.
Plot4	SenkouSpan_A	Up Cloud	Plots the Senkou Span A value.
Plot5	SenkouSpan_A	Down Cloud	Plots the Senkou Span B value.
Plot6	A_Cloud	Up/Down
Plot7	B_Cloud	Up/Down
Plot8	Trend Dir	Up/Down/Neutral
Plot9	Price Loc	Up/Down/Neutral
Plot10	Chikou Dir	Up/Down/Neutral

When applied to a chart, this indicator displays plots and clouds in the same subgraph as the price data.