What it measures
Ichimoku Kinko Hyo ("one-glance equilibrium chart") shows trend direction, momentum and potential support or resistance at the same time. Three of its lines are range midpoints, the average of the highest high and lowest low over a window, so they react to the range price has covered rather than to closes alone. Span A averages two of those midpoints, and the lagging span is simply the close, shifted back.
| Line | StockVyze output | Definition (default windows) |
|---|---|---|
| Conversion line (Tenkan-sen) | conversion | Midpoint of the last 9 bars |
| Base line (Kijun-sen) | base | Midpoint of the last 26 bars |
| Leading span A (Senkou A) | span_a | Average of conversion and base, drawn 26 bars ahead |
| Leading span B (Senkou B) | span_b | Midpoint of the last 52 bars, drawn 26 bars ahead |
| Lagging span (Chikou) | lagging | The close, drawn 26 bars back |
The cloud (kumo) is the area between span A and span B. It is shaded bullish when span A is above span B and bearish when it is below.
How to read it
- Price versus the cloud. Price above the cloud is conventionally read as an uptrend, below it a downtrend, and inside it a range or transition. Traders watch the cloud's edges as potential support and resistance.
- Cloud thickness. A thick cloud is usually treated as a stronger zone that is harder to break through; a thin cloud as a weaker one.
- Cloud color ahead. Because the spans are projected 26 bars forward, the cloud already drawn to the right of the last bar shows where potential support or resistance would sit if price keeps its current range. A cloud turning from bearish to bullish ahead is often read as an early sign of a trend change.
- Conversion and base cross. The conversion line crossing above the base line is a bullish signal; below, bearish. A cross above the cloud is stronger than one inside or below it.
- Lagging span. The lagging span above the price of 26 bars ago confirms bullish momentum; below it, bearish.
The strongest bullish reading has all of them agreeing: price above a bullish cloud, the conversion line above the base line, and the lagging span above past price.
Common mistakes
- Reading the cloud at the wrong bar. The cloud under today's candle was computed 26 bars ago. To test "price is above the cloud" in a scan, compare today's close with the spans as they were 26 bars earlier (see below).
- Trading every cross. Conversion and base crosses inside a thick cloud are frequent and mostly noise.
- Ignoring the timeframe. The 9/26/52 windows come from a six-day trading week. On daily US stocks many traders keep them unchanged for comparability; changing them makes your readings differ from everyone else's.
Use it in a scan
Stocks trading above the cloud, comparing today's close with both spans as they were projected 26 bars ago:
c > max((((highest(h, 9) + lowest(l, 9)) / 2 + (highest(h, 26) + lowest(l, 26)) / 2) / 2)@26, ((highest(h, 52) + lowest(l, 52)) / 2)@26)A fresh conversion/base cross:
cross_up((highest(h, 9) + lowest(l, 9)) / 2, (highest(h, 26) + lowest(l, 26)) / 2)Wrap a lagged expression in parentheses: x@26 binds tighter than arithmetic, so a / 2@26 would lag only the 2.
Inputs
| Input | Type | Default | Range |
|---|---|---|---|
conversion_period | integer | 9 | 1 – 300 |
base_period | integer | 26 | 1 – 300 |
span_b_period | integer | 52 | 1 – 300 |
displacement | integer | 26 | 1 – 100 |
Outputs
conversion, base, span_a, span_b, lagging