Ichimoku Cloud is a group of technical indicators that’s used to understand trends, momentum, support,
and resistance by calculating averages.
Furthermore, the Ichimoku Cloud indicator is made up of two components:
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TenkanSen: The short-term indicator
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KijunSen: The long-term indicator
There’s a cloud that’s formed as a result of plotting the averages and using the components on a chart.
One glance at this cloud can tell you multiple things like:
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Uptrend: If the price is above the cloud
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Downtrend: If the price is below the cloud
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Neutral: If the price is in the cloud
Moreover, if the cloud and the price are moving in the same direction, there’s much more confidence in the
trend that’s forming. In fact, it’s a trading signal.