The Ichimoku cloud
Reported only when price is fully clear of the cloud and the cloud is thick enough to be a reference — and read 26 bars back, where the cloud actually is.
- Assumes:
- The rest of this family
- Markets:
- Crypto · Equities · Indices
- Timeframes:
- 4h · 1d
What it means
Ichimoku plots several lines, of which this product uses two: the pair whose span forms the cloud. The area between them is shaded, and price being above or below that area is the reading most people mean by the indicator.
The cloud is drawn ahead of price by convention. That projection is the part most implementations get wrong, and it is the part that decides the answer in a trend.
How we detect it
The engine reads the cloud 26 bars back from the last bar, because the cloud is plotted that far ahead. Reading the span at the last index compares price with a cloud that is not there yet, and in a trending market that is far enough away to flip the answer.
Two gates then apply. If price is inside the cloud, nothing is reported — a cloud you are within is not a reference. If the cloud is thinner than half an ATR, nothing is reported either, because a thin cloud is a line rather than an area and crossing it means very little.
Only when price is fully clear of a cloud of real thickness does the engine report above-cloud or below-cloud, along with the cloud's edges and its thickness in ATR so a reader can see how much of a reference it was.
When the read carries information
- There is enough history: the calculation needs 52 bars plus the 26-bar shift before it can be read at all.
- The instrument trades continuously enough that a 26-bar projection describes the same market it was drawn from.
- The reading is treated as a position relative to an area, not as an event.
When it misleads
- In quiet markets the cloud is often thin, so this indicator is unsupported for long stretches — correctly, but a reader may expect an answer and receive none.
- The cloud is built from highs and lows over long look-backs, so it responds slowly after a structural repricing.
- Price sitting just outside a cloud can flip between states on ordinary noise; the thickness gate reduces this and does not remove it.
How it reaches you
Ichimoku is the most gated of the three indicators here, and it is the one most likely to report nothing. That is the intended behaviour: an indicator that speaks only when the chart supports it.
Above or below a cloud is a description of where price is. It is not a signal, and nothing on our surfaces treats it as one.
Worked example
No worked example is shown here. Display rights over the market data a real example would use have not been established, and an unanswered rights question is treated as a refusal.
Outstanding before an example can be shown
- Display rights over the underlying data have not been established.
- No data source has been selected for it.
- No freshness terms cover the data it would use.
- The example has not been made: no fixture, no figure, no asset review.
- Its caption and image description do not exist in both published languages.
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