Ichimoku is a versatile indicator, which aims to define the support and resistance levels, to identifiy the direction of the trend and to gauges its momentum. It is calculated using the average of the highs and lows over a given period. The output of the indicator are the 5 lines: conversion line, base line, leading span A, leading span B and the lagging span. The areas between these lines can be shaded according to further conditions, thus creating the clouds. There is a number of signals that this indicator can generate - the most popular is the buy signal when the price moves above the cloud and the sell signal when the price moves below the cloud.

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