TrendExpert Curated · Playbook

Ichimoku

Ichimoku Cloud

A five-line all-in-one trend system that reads regime, momentum, and dynamic support/resistance from a single chart overlay.

The Ichimoku Cloud is a five-line trend system from Japan that reads regime, momentum, and support/resistance at a glance. Price above the cloud = bullish regime; the Tenkan/Kijun cross is the momentum trigger; the cloud itself acts as dynamic support or resistance and is projected 26 bars into the future. Default settings: 9, 26, 52, displacement 26.

Ichimoku Kinko Hyo ("one-glance equilibrium chart") plots five lines: Tenkan-sen (9-bar midpoint), Kijun-sen (26-bar midpoint), Senkou Span A (the average of Tenkan and Kijun, plotted 26 bars forward), Senkou Span B (52-bar midpoint, also plotted 26 bars forward), and Chikou Span (close shifted 26 bars back). The area between Senkou A and Senkou B is the cloud (Kumo) — projected ahead so the chart shows future support/resistance before price gets there.

The three reading lenses are: price vs cloud (above = bullish regime, inside = no-trade zone, below = bearish regime); the Tenkan/Kijun cross (faster momentum trigger); and the future cloud (Senkou A above or below Senkou B colors the cloud green or red, signalling the regime that's coming). Chikou Span confirms by checking that lagged price isn't tangled in old price action. Ichimoku gives the richest single-glance read of any classical system — at the cost of more signals to interpret.

Entry ideas

How do I enter trades using Ichimoku?

03ideas

01Entry idea

Cloud breakout long

A regime-change long that fires when price reclaims the cloud after a downtrend or consolidation.

02Entry idea

TK cross above the cloud

The classic Tenkan/Kijun bullish cross, filtered for quality by requiring price to be above the cloud.

03Entry idea

Future-cloud twist

An early-regime long that anticipates a bullish regime by reading the projected cloud color flip.

Exit ideas

When should I exit a Ichimoku trade?

03ideas

01Exit idea

TK cross down

The fastest Ichimoku exit, mirroring the TK cross-up entry.

02Exit idea

Cloud break exit

A patient regime exit that holds until price falls back into or under the cloud.

03Exit idea

Kijun trailing stop

A volatility-adaptive trailing exit anchored to the Kijun-sen line.

Utilities

What else is Ichimoku good for?

02ideas

01Utility

Cloud regime filter

A bias filter that gates any directional strategy by the price-vs-cloud regime.

02Utility

Higher-timeframe cloud bias

A higher-timeframe alignment filter that pins entries to the daily Ichimoku regime.

How do I read Ichimoku?

Close above the cloud = bullish regime. Close below the cloud = bearish regime. Close inside the cloud = no-trade zone (undefined regime).
Tenkan/Kijun cross = momentum trigger. Tenkan crossing above Kijun is bullish; crossing below is bearish. The position of the cross relative to the cloud matters — crosses above the cloud are strong-trend continuation signals; crosses inside the cloud are usually noise.
Cloud thickness = strength of the projected support/resistance. A thick cloud is hard to push through; a thin cloud breaks easily.
Future-cloud color (the cloud 26 bars ahead): green when Senkou A is above Senkou B, red when below. A future-cloud twist (color flip) is an early regime-change signal.
Chikou Span confirmation: if the lagged close is clear of past candles, the regime is confirmed. If it is tangled in past price, momentum is mixed — wait for clarity.
Price respecting the Kijun-sen during a trend is a clean continuation pattern. Bounces off the Kijun are textbook trend-following entries.

What are the default Ichimoku settings?

Parameter	Default	When to adjust
Tenkan-sen length	9	Goichi Hosoda's original. Most crypto traders also use 9. Some intraday traders drop to 7 for faster signals at the cost of more noise.
Kijun-sen length	26	Original. The medium-term equilibrium and the most-respected dynamic support/resistance level on the chart. Rarely worth changing.
Senkou Span B length	52	Original. Doubled Kijun length sets the slow boundary of the cloud. Tuning down (e.g. to 40) makes the cloud more reactive but less stable as a regime reference.
Displacement	26	Forward and backward shift for Senkou Spans and Chikou Span. Must match the Kijun length conceptually — changing this without retuning the system is the most common Ichimoku tuning mistake.

How do I code Ichimoku in Pine Script?

//@version=5
indicator("Ichimoku Cloud Example", overlay=true)

tenkanLen    = input.int(9,  title="Tenkan-sen Length",    minval=1)
kijunLen     = input.int(26, title="Kijun-sen Length",     minval=1)
senkouBLen   = input.int(52, title="Senkou Span B Length", minval=1)
displacement = input.int(26, title="Displacement",         minval=1)

donchian(len) => math.avg(ta.lowest(len), ta.highest(len))

tenkan  = donchian(tenkanLen)
kijun   = donchian(kijunLen)
senkouA = math.avg(tenkan, kijun)
senkouB = donchian(senkouBLen)
chikou  = close

plot(tenkan, title="Tenkan-sen", color=color.blue)
plot(kijun,  title="Kijun-sen",  color=color.red)
p1 = plot(senkouA, title="Senkou Span A", color=color.green, offset=displacement)
p2 = plot(senkouB, title="Senkou Span B", color=color.red,   offset=displacement)
fill(p1, p2, color=senkouA > senkouB ? color.new(color.green, 85) : color.new(color.red, 85))
plot(chikou, title="Chikou Span", color=color.purple, offset=-displacement)

Pine has no built-in ta.ichimoku() — the lines are computed manually from highest/lowest. The donchian() helper returns the midpoint of an N-bar range, which is exactly what Tenkan, Kijun, and Senkou Span B require. The two Senkou plots are forward-shifted with offset=displacement, and fill() between them produces the colored cloud that automatically swaps green/red based on Span A vs Span B. Chikou is just the close plotted backwards with a negative offset.

How is Ichimoku calculated?

Ichimoku is built from midpoints of high/low ranges over three lookback windows, plus two derived lines (one averaging Tenkan and Kijun, one lagging price). Two of the lines are projected forward to form the cloud; one is shifted backward to confirm regime against past price.

1.Tenkan-sen = (9-bar highest high + 9-bar lowest low) / 2 — the short-term equilibrium line.
2.Kijun-sen = (26-bar highest high + 26-bar lowest low) / 2 — the medium-term equilibrium line.
3.Senkou Span A = (Tenkan-sen + Kijun-sen) / 2, plotted 26 bars forward — one boundary of the cloud.
4.Senkou Span B = (52-bar highest high + 52-bar lowest low) / 2, plotted 26 bars forward — the other cloud boundary. Color the cloud green when Span A > Span B, red when below.
5.Chikou Span = current close, plotted 26 bars back — used to confirm regime by checking if lagged price is clear of old price action.

When does Ichimoku fail?

Ichimoku is a trend system. In three regimes it fires misleading signals.

Tight ranges put price inside the cloud, where Ichimoku explicitly defines the regime as undefined. Traders who ignore the rule and take TK crosses inside the cloud get whipsawed — every cross is noise because the cloud itself has no slope to follow.

Fast reversals from extended trends are the second failure mode. Ichimoku exits via the Kijun, cloud break, or TK cross — all of which lag. When a strong trend ends on a single sharp candle (news, gap, flash crash), Ichimoku traders give back significant profit before any of the exit signals fire.

Low-volatility drift produces a flat, thin cloud and constantly-crossing Tenkan/Kijun lines. Each cross looks valid; in aggregate they bleed accounts. Pair Ichimoku with a volatility filter (ATR percentile, ADX above 20) so signals only fire when the market is actually moving.

Ichimoku is also less reliable on intraday timeframes below 1H — the displacement assumes a daily-chart cadence and shorter timeframes tend to fight that rhythm.

What mistakes do traders make with Ichimoku?

Treating the TK cross as a standalone signal. The cross is a timing trigger, not a regime read. Always filter by cloud position — TK crosses below the cloud rarely lead to sustainable longs.
Ignoring the Chikou Span. The lagged close is the most-overlooked Ichimoku component, but it is the cleanest single-line confirmation: if Chikou is clear of past price action, the regime is real; if it is tangled, the move is noise.
Trading inside the cloud. The cloud is explicitly an undefined-regime zone — no edge exists there. Skip trades until price exits the cloud in either direction.
Re-tuning the lengths casually. Hosoda's 9/26/52/26 ratios are mathematically interrelated; changing one without the others breaks the system. If you must tune, scale all four proportionally.
Using Ichimoku on noisy lower timeframes without parameter adjustment. The defaults assume daily-bar rhythm. On 5-minute charts, the cloud thrashes around price almost continuously. Either move to higher timeframes or scale all parameters together.

How does Ichimoku compare to similar tools?

Indicator	When to prefer
MACD	MACD gives one momentum read (the histogram + signal cross); Ichimoku gives five interlocking reads with projected support/resistance. Use MACD when you want a single clear signal; use Ichimoku when you want a multi-lens regime picture and can afford the complexity.
Supertrend	Supertrend collapses regime to a single binary flip with volatility-adjusted stops. Ichimoku layers regime, momentum, and future-projection at the cost of being harder to read at a glance. Supertrend for mechanical systems; Ichimoku for discretionary trend reads.
EMA crossover	A two-EMA cross is a stripped-down version of the same regime read. Use EMA crossovers when you want clean rules and minimum interpretation; use Ichimoku when you want forward-projected support/resistance via the cloud.

Ichimoku FAQ

Why are the Ichimoku settings 9, 26, and 52?

Goichi Hosoda calibrated these in the 1930s when the Japanese trading week was 6 days. Nine bars covered ~1.5 weeks, 26 bars covered ~1 month, 52 bars covered ~2 months. The 5-day week broke the original arithmetic but the ratios held up empirically across markets and timeframes, so the original numbers became standard. Most traders who tune them end up overfitting one backtest window.

What is the cloud (Kumo) actually showing?

The cloud is the area between Senkou Span A (Tenkan/Kijun midpoint) and Senkou Span B (52-bar midpoint), projected 26 bars into the future. It represents projected support/resistance: a thick cloud is harder to break through; a thin cloud breaks easily. Because it is plotted ahead of price, you can see where Ichimoku expects support/resistance to appear before price gets there.

Is Ichimoku better than MACD?

They answer different questions. MACD reads momentum from the EMA gap and gives one timing signal per regime. Ichimoku reads regime, momentum, and projected support/resistance from five lines and gives multiple interacting signals. MACD is cleaner for systematic execution; Ichimoku is richer for discretionary reads. Many traders combine them: Ichimoku for regime, MACD for entry timing within that regime.

Does Ichimoku work on crypto?

Yes, on higher timeframes (4H and above). Crypto markets are 24/7 and the defaults still hold up — most successful crypto Ichimoku setups keep the original 9/26/52/26. Lower timeframes (15m, 1H) generate more whipsaws and benefit from pairing with a volatility filter, but parameter changes without proportional re-tuning of all four numbers usually make things worse, not better.

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About these ideas

Each entry, exit, and utility rule in the Playbook is hand-picked from established trading literature, validated against historical backtests, and reviewed by the PineWiz team. We add new ideas as we encounter them and refresh existing ones when market behavior or default settings shift. Last review: May 2026.

Educational content. Not financial advice.