The first time you switch Ichimoku on, the chart looks crowded: five lines and a coloured cloud. But most of it is built on range midpoints over different periods, plus Span A, derived from Tenkan and Kijun, and the Chikou, built on the close. This lesson introduces each component; the next shows how to read them with the price.
What you will learn
Understand the basic calculation behind most Ichimoku lines.
Know the five components and the period of each.
See why the cloud is drawn ahead of price and one line behind it.
The lesson as a short video · 24 seconds · Watch on YouTubeIn this lesson
Most Ichimoku lines are not an average of closing prices but the midpoint of the range: (highest price in the period + lowest price in the period) ÷ 2. They tell you the halfway point between the top and the bottom of the last few sessions.
Worked exampleFor an invented stock, the highest price of the last 9 sessions is 11.00 and the lowest 10.00. So the first line = (11.00 + 10.00) ÷ 2 = 10.50. If the highest of the last 26 sessions is 11.60 and the lowest 9.40, the second is also 10.50. Same calculation, different period.
The five components
1Tenkan-sen (9)2Kijun-sen (26)3Senkou Span A4Senkou Span B (52)5Chikou Span
The dashed line is today. The cloud is drawn ahead of it, and the Chikou behind it.
1. Tenkan-senThe midpoint of the last 9 sessions. The fastest line.
2. Kijun-senThe midpoint of the last 26 sessions. Slower and calmer.
3. Senkou Span AThe average of the first two lines, drawn 26 sessions ahead.
4. Senkou Span BThe midpoint of the last 52 sessions, drawn 26 sessions ahead.
The space between Senkou Span A and B is the "cloud". When A is above B it is usually shaded one colour, and when B is above A another. The 9, 26 and 52 periods are the usual settings, and some people change them.
Why are some lines drawn ahead or behind?
The cloud is drawn ahead of the latest price, but that is not a forecast. It is calculated entirely from prices that already happened; plotting it forward is only a way of displaying it. And the Chikou is the price itself drawn backwards, so you can easily compare it with the price 26 sessions ago.
Watch outThe part of the cloud ahead of today gives the impression of showing the future. It does not: it is old prices drawn in a new place.
Switch on Ichimoku
Open any stock chart on FoudaLens, switch on Ichimoku, and try to identify each of the five lines by its colour and position.