Ichimoku cloud
Also known as: Ichimoku
The Ichimoku cloud is a technical indicator made up of several lines plotted on a price chart at once, designed to show trend direction, momentum, and likely in a single view rather than requiring several separate indicators. It was developed in Japan and its full name translates roughly to one glance equilibrium chart, reflecting the goal of summarizing a 's overall technical picture at a glance.
The indicator's most recognizable feature is the cloud itself, a shaded area formed between two of its lines and projected forward on the chart, which represents a zone of support or resistance. Price trading above the cloud is generally read as a bullish setup, price trading below it as bearish, and price trading inside the cloud as a period of indecision or transition. The cloud's thickness is also read as a signal, a thicker cloud represents a stronger support or resistance zone, while a thinner cloud suggests that zone could be broken through more easily. Two additional lines, a faster and a slower style line, are used similarly to a crossover to gauge momentum shifts over shorter periods within the larger trend the cloud describes.
Because it layers several signals onto one chart, the Ichimoku cloud can look cluttered to investors used to simpler indicators, but its appeal is that a trader can judge trend, momentum, and key levels from a single glance rather than switching between separate tools. It is used across many markets, though it remains especially popular for reading trend structure over longer periods on daily and weekly charts.