The Ichimoku Cloud is a form of technical analysis that was developed by a Tokyo newspaper writer in the 1960’s.The benefits of Ichimoku is that the cloud patterns (more on that later) attempt to identify an immediate trend and direction in the markets. It uses moving averages to define support and resistance zones, identifies trend and direction and also helps to gauge momentum of price action.
What many traders like about Ichimoku is that it not only uses the cloud to define support and resistance but it also uses the Kijun, Tenkan and Chikou lines that are very similar to moving averages and can help to provide bullish or bearish forward indicators.
Sometimes beginners can ignore the cloud because they feel it is complex. Although Ichimoku analysis may look complex, once you grasp the basic concepts associated with using the indicator it is relatively simple to use.
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