Ichimoku Cloud

Trend

A complete Japanese trading system (Goichi Hosoda) that shows trend, support, resistance and momentum at a glance. The 'cloud' (Kumo) is its best-known component.

In its original form this indicator uses volume and/or the daily range (High/Low). The scanner only has closing prices and approximates those inputs (see the note at the bottom). So treat the absolute values as indicative; the direction and the crossings remain usable.

Construction & calculation

Tenkan-sen (conversion line): the midpoint of the highest and lowest price over 9 bars.
Kijun-sen (base line): the same over 26 bars.
Senkou Span A: the average of Tenkan and Kijun, projected 26 bars forward.
Senkou Span B: the midpoint of the highest and lowest price over 52 bars, also projected 26 bars forward.
The space between Span A and Span B is the cloud. Chikou Span is the closing price, projected 26 bars backward.

Tenkan = (highest(9) + lowest(9)) / 2 Kijun = (highest(26) + lowest(26)) / 2 Span A = (Tenkan + Kijun) / 2 -> 26 forward Span B = (highest(52) + lowest(52)) / 2 -> 26 forward

Interpretation

Price above the cloud = bullish; below the cloud = bearish; inside the cloud = no direction, stay aside.
A thick cloud = strong support or resistance; a thin cloud = the zone is easy to break through.
When the cloud changes color in the future (Span A crosses Span B), that heralds a trend change.
The TK cross (Tenkan crosses Kijun) is the actual entry signal.

How the signal works in this scanner

Buy signal (green)Tenkan-sen crosses the Kijun-sen from below to above. If the price is also above the cloud, the label explicitly notes '(above cloud)' — that is the strong variant.

Sell signal (red)Kijun-sen crosses the Tenkan-sen from below to above; with the price below the cloud it is marked '(below cloud)'.

Watch-outs & pitfalls

A TK cross inside the cloud is weak: the system is then internally contradictory.
Ichimoku works best in trending markets and on somewhat higher timeframes. In sideways markets the TK cross produces a lot of noise.
Requires at least 60 trading days of data.

Data note. The scanner works exclusively with closing prices (daily). Wherever the classic formula needs High, Low or Volume, these are approximated: the daily range via the rolling max/min of the closing price over the recent bars, and volume via the relative size of the day's move compared with the recent average. The signal logic is identical to the original, but absolute values may differ slightly from platforms that use intraday data and real volume.

Disclaimer. This explanation is educational and does not constitute investment advice. A technical signal is a probability, not a certainty: always use it together with other signals, the broader trend, the news around the stock and a predefined risk-management plan.

Generated: 26/10/2026 12:04