Ichimoku Cloud Strategy: The Five Lines, How to Read the Cloud and a Test on Real V75 Candles
The Five Ichimoku Lines
| Line | How it is calculated | What it shows |
|---|---|---|
| Tenkan-sen (conversion) | Middle of the 9-period high and low | Short-term balance |
| Kijun-sen (base) | Middle of the 26-period high and low | Medium-term balance; often support or resistance |
| Senkou Span A | (Tenkan + Kijun) ÷ 2, shifted 26 periods ahead | One edge of the cloud |
| Senkou Span B | Middle of the 52-period high and low, shifted 26 ahead | The other edge of the cloud |
| Chikou Span (lagging) | Today’s close, shifted 26 periods back | Confirms the trend against past prices |
Three Common Ichimoku Signals
- Cloud breakout: price closes above (or below) the whole cloud.
- TK cross: Tenkan crosses above Kijun (bullish) or below (bearish).
- Kijun bounce: in a trend, price pulls back to Kijun and continues.
Real Test on Volatility 75
| Signal (500 V75 5-minute candles) | Signals | Moved the signal way over the next 6 candles |
|---|---|---|
| Cloud breakout | 20 | 65% |
| Tenkan/Kijun cross | 18 | 44% |
With samples this small, a 65% result can easily be luck. The cloud is still useful as a visual filter: many traders only take Rise or multiplier Up trades when price is above the cloud.
Ichimoku for Scalping?
Ichimoku needs 52 candles before the cloud is complete and shifts lines 26 periods, so on 1-minute charts it reacts slowly to a fast index. Most traders use it on 5-minute to 1-hour charts.
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Frequently Asked Questions
How do you use the Ichimoku Cloud?
Trade in the direction of price relative to the cloud, and use Tenkan/Kijun crosses for timing.
What are the best Ichimoku settings?
The standard 9, 26, 52. Some crypto traders use 20, 60, 120.
What does it mean when price is inside the cloud?
There is no clear trend; many traders stay out.
Is Ichimoku good for Deriv synthetic indices?
It describes trend well, but our small test showed no reliable edge.
What is a TK cross?
Tenkan-sen crossing Kijun-sen; above is bullish, below is bearish.
Is Ichimoku good for scalping?
It reacts slowly on 1-minute charts; most use it on 5-minute and higher.
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