06. How the cloud is constructed

LESSON 06 OF 13 · UNDERSTAND FORWARD PLACEMENT

How the cloud is constructed

Current cloud and forward cloud are different chart positionsOriginal educational schematic. Current cloud and forward cloud are different chart positions. This illustration is not market data.Price compared with cloud hereNo future price candlesEarlier calculationsMore recent calculationsToday

Original schematic · For learning, not a market forecast.

Senkou Span A is the average of Tenkan and Kijun. Span B is the midpoint of the 52 bar high–low range. Both are placed forward by the same displacement; the area between them forms the cloud.

Two different comparisons

The cloud under today’s price comes from earlier calculations. The cloud extending beyond today comes from more recent calculations. Do not compare today’s candle with the far right cloud and call that a breakout.

Span B can remain flat when the relevant extremes stay unchanged. Span A incorporates shorter and medium term balance, so its shape can differ. Their intersection is a cloud twist; it is a change in their relative order, not a promise of a price reversal.

A worked example

Tenkan = 118 and Kijun = 110 gives Span A = 114. A 52 bar high of 126 and low of 94 gives Span B = 110. Those values define a four point band at the forward plotting position. The future price path is still unknown.

Check your understanding

Can you use the forward cloud as evidence that a future candle already broke out?

Reveal the explanation

No. The cloud is known reference information; future candles do not yet exist.

Further reading: Kojiro’s Japanese Ichimoku lesson 06. This English lesson and its diagram were independently written and created by Ichimoku Master.

Kei with the original Japanese Ichimoku books

AUTHOR

Kei

Kei is a Japanese forex trader and mentor who has traded since 2013. He teaches Ichimoku in English from the original Japanese texts, with a focus on chart analysis, trading psychology and risk management.