price enters a bearish trend afterwards. Chinoku Span exact copy of the price action, but it is displaced backwards by 26 periods. If you are trading using the Cloud strategy, your Ichimoku indicator could be setup to look the following way: In this chart image you see that we only have the Cloud as part of the Ichimoku indicator. The first line forming the Cloud averages the highs and the lows of the Kijun Sen and the Tenkan Sen. The Ichimoku indicator consists of three lines and a Cloud formed by other two lines.
You can always add and remove components of the indicator. The default parameters of the Ichimoku tool are 9, 26,. The other line of the Cloud shows a midpoint of the highs and the lows on the graph in a 52 period timeframe. The black arrows on the chart show the moments when the price tests the Kijun Sen as a resistance. When the price starts trending in our favor, we will continue to stay in the trade until the price action breaks the blue Kijun Sen in the opposite direction. The Ichimoku Cloud indicator is fully customizable. We will trade the Forex pair in the direction of the Cloud breakout trying to ride a trend. In this manner, the Chinoku Span line is a displaced lagging component within the Kumo Cloud structure. Now we need to follow the green Chinoku Span. Suite 11, Second Floor, Sound Vision House, Francis Rachel Str. Also, you may have noticed that we used the Cloud component in each of our three trading strategies.