Why Ichimoku Cloud Was Created

The Ichimoku Cloud was developed in the late 1930s by Japanese journalist Goichi Hosoda, who sought to create a comprehensive technical analysis tool that could provide traders with a clearer view of market trends, momentum, and support/resistance levels in a single glance. At the time, traditional Western charting methods were seen as overly simplistic and fragmented, often requiring multiple indicators to gain a full picture of the market.

Hosoda’s goal was to design a self-sufficient system that could offer more reliable trade signals with fewer false positives. He believed that price action contained all necessary information—but it needed to be interpreted correctly using time-based relationships. Thus, he constructed the Ichimoku Cloud (Ichimoku Kinko Hyo, meaning "one-glance equilibrium chart") to encapsulate trend direction, momentum, and potential reversal zones simultaneously.

The indicator combines five key calculations—Tenkan-sen, Kijun-sen, Senkou Span A, Senkou Span B, and Chikou Span—each derived from specific time periods. These elements work together to create the cloud (Kumo), which visualizes future areas of support and resistance based on historical averages.

Hosoda spent decades refining the indicator before publishing it in the 1960s. Its creation reflects a desire for holistic insight into market behavior without reliance on external tools. In crypto markets, where volatility and rapid shifts are common, its multi-dimensional approach offers clarity that single-line indicators cannot match.