Ichimoku Kinko Hyo

Equilibrium at One Glance

Ichimoku Kinko Hyo — 'equilibrium at one glance' in Japanese — is a complete trend identification system. Developed in the 1930s by Goichi Hosoda and refined over 30 years before release, it combines lagging and leading elements to capture 70–80% of any given trend. It tells you the trend direction, the momentum, the strength of S/R, and potential future levels — all on one chart.

• Ichimoku = trend following ONLY — it does NOT work in range-bound markets; never apply it to consolidation
• Goal: capture 70–80% of the trend — the 'meat' — not the absolute top or bottom
• Five components: Tenkan-sen, Kijun-sen, Senkou Span A, Senkou Span B, Chikou Span
• The Kumo (Cloud) is formed by Senkou Span A and B — it acts as dynamic S/R
• Thicker Kumo = stronger S/R; thinner Kumo = weaker S/R; Kumo Twist = potential trend change signal
• Crypto settings (24/7): 10/30/60/30 or doubled 20/60/120/30 (preferred — fewer, higher-quality signals)

The Five Components and the Kumo

Each component of Ichimoku answers a specific question about the market. Together they create a self-contained system where every entry, exit, and trend signal can be derived from a single chart. The Kijun-sen is the most important component — it is the backbone of the trend read and the primary trailing stop tool.

• Tenkan-sen (Conversion Line): fast moving average (avg of high+low over short period); most responsive to recent price action
• Kijun-sen (Baseline): slow moving average (avg of high+low over longer period); the most important component; price above = bullish, below = bearish; used as trailing stop
• Senkou Span A: average of Tenkan + Kijun; forms one boundary of the Cloud; plotted 26 periods ahead
• Senkou Span B: avg of high+low over longest lookback; forms the other boundary; plotted 26 periods ahead
• Chikou Span (Lagging Span): current price plotted 26 periods back; above past price = bullish, below = bearish
• Bullish Kumo: Senkou Span A above B = green cloud = support zone ahead
• Bearish Kumo: Senkou Span B above A = red cloud = resistance zone ahead
• Kumo Twist: Span A crosses Span B — signal of a potential trend change; look for this ahead of price

An Ichimoku chart shows price trading above the Kumo (Cloud) with both Senkou Span A and B clearly below current price. The Kijun-sen (Baseline) is also below current price. What does this configuration confirm about the trend?

• ● Bullish — price above cloud + above Kijun confirms strong bullish trend structure in Ichimoku
• ● Bearish — the Kijun should be above price for a bullish read; Kijun below price is a short signal
• ● No signal yet — Ichimoku requires all 5 components to align simultaneously before any directional read

Answer it (with a live chart) in the interactive lesson.