Four steps, in order
- Where is price relative to the cloud?Above it means price is higher than the cloud boundaries shown at the current session; those boundaries are calculated from earlier data and shifted 26 sessions forward. Below it, the reverse. Inside it means price sits between the two boundaries and the picture is unclear.
- The cloud's colour and thicknessWhen Span A (the average of Tenkan and Kijun) is above Span B, the reading derived from the two shorter periods is higher than the 52-session midpoint. Thickness is the gap between them: the wider it is, the bigger the difference between the two periods.
- Tenkan and KijunTenkan above Kijun means the midpoint of the last 9 sessions is above that of the last 26. It describes the short-term move relative to the medium term.
- The Chikou and the old priceChikou above the price 26 sessions back means today's price is above the price back then. A simple comparison of two points.
A full worked example
Notice that the whole description is about what has happened. It contains not one sentence about tomorrow. That is natural, since every figure in it comes from past prices.
When every component agrees
In the example, all four steps said the same thing. That happens often after a long move in one direction, because all five components are built on the same highs and lows over different periods. Their agreement is a consistent description of one move, not five independent testimonies.
In a sideways market, price keeps moving in and out of the cloud, and Tenkan and Kijun cross back and forth. Ichimoku then describes the absence of a trend, which is also information.
Apply the four steps
Open any stock chart on FoudaLens, switch on Ichimoku, and write the stock's description in four sentences following the lesson's order.
Check yourself
1. Price is 9.50 and the cloud spans 9.20 to 9.80. Where is price?
2. Every Ichimoku component shows price above its range. What does that mean?
Summary
- Read in order: price versus the cloud, its colour and thickness, Tenkan and Kijun, then the Chikou.
- Each step describes price against a component built from past prices; none is a forecast.
- Agreement describes one move; in a sideways market Ichimoku describes the absence of a trend.