---
title: 'Best Ichimoku Cloud Strategy for Day Trading Forex & Stocks (Explained)'
source: 'https://youtube.com/watch?v=G89oF-uMtNE'
video_id: 'G89oF-uMtNE'
date: 2026-08-05
duration_sec: 512
---

# Best Ichimoku Cloud Strategy for Day Trading Forex & Stocks (Explained)

> Source: [Best Ichimoku Cloud Strategy for Day Trading Forex & Stocks (Explained)](https://youtube.com/watch?v=G89oF-uMtNE)

## Summary

This video provides a concise, under-10-minute explanation of the Ichimoku Cloud indicator, focusing on practical usage techniques rather than calculations. It breaks down each component—conversion line, baseline, leading spans, and lagging span—and demonstrates how to combine them for trading signals, including cloud-based stop-loss placement and several strategy variations.

### Key Points

- **Ichimoku Cloud Overview** [00:03] — The Ichimoku Cloud is an indicator that shows trends and momentum, but unlike MACD, it filters out range-bound market noise using the Kumo cloud.
- **Conversion Line and Baseline** [01:12] — The blue conversion line (Tenkan-sen) acts like a fast moving average, sensitive to price, identifying short-term trend. The red baseline (Kijun-sen) is slower, identifying longer-term trend. Crossovers signal trades: blue crossing below baseline = short, above = long.
- **Kumo Cloud and Leading Spans** [02:06] — The Kumo cloud, formed by leading spans A and B, filters noise and shows trend direction. Green cloud (span A above B) indicates strong upward momentum; red cloud indicates downward momentum. Rules: price above cloud = only long signals, below = only short, inside = no trades.
- **Combining Components** [03:15] — For a long: price above cloud and baseline, conversion line crosses above baseline. For a short: price below cloud and baseline, conversion line crosses below baseline. Avoid trades when price is inside the cloud.
- **Lagging Span (Chikou Span)** [03:54] — Optional second confirmation. If lagging span is above price and heading upwards, confirms strong uptrend; if below and heading downwards, confirms downtrend.
- **Using the Indicator on TradingView** [04:35] — The presenter suggests using a TradingView indicator by 'skyrock signals' to simplify signals, making it easier to identify entries. Also, the cloud can be used for stop-loss placement: set stop-loss just below/above the cloud, and close if price breaks through.
- **Baseline Crossover Strategy** [05:32] — Simple strategy using only conversion line and baseline: long when conversion crosses above baseline, short when it crosses below.
- **Cloud Crossover Strategy** [05:57] — Take long when price crosses above the cloud, short when price crosses below the cloud.
- **Combining with Other Indicators** [06:10] — Kumo cloud can be combined with Chaikin Money Flow (long when CMF above zero and price above cloud; short when CMF below zero and price below cloud) and Parabolic SAR (long when SAR below candles and price above cloud; short when SAR above candles and price below cloud). Avoid trades inside cloud.
- **Final Tips** [07:25] — The Ichimoku cloud is versatile and can be combined with other indicators. The presenter advises that you don't have to follow original rules; test and find winning techniques that work for you.

### Conclusion

The Ichimoku Cloud is a versatile trend and momentum indicator that, once understood, can be effectively combined with other tools to generate trading signals and manage risk. The key is to practice and adapt the rules to your own trading style.

## Transcript

you need to know about the ichimoku cloud indicator in less than 10 minutes and as usual i'm not going to waste your time calculations of the indicator this video is purely about explaining
the different techniques and how to use the indicator so that you trading arsenal right after watching this video so without further ado let's get started so the ichimoku cloud
is an indicator that shows trends and momentum on the market however unlike a normal momentum indicator like the macd crossover the market is on a range the ichimoku cloud instead filters them
out using what's called the kumo cloud we'll get to that in a minute so if you search ichimoku indicator on tradingview you'll get this a bunch of messy lines so at first glance the ichimoku indicator may look messy and complex
but it's actually very very simple once you know how to use it so let's break down the parts so to make it simple conversion
cankinson and the baseline which is also known as the kijunsen so these two lines acts very similar to a moving average crossover the blue line acts like a faster moving
average it is more sensitive to price action and is used to identify the short-term trend and the red line acts like a slower moving average it is less sensitive to price action and
can be used to identify a more longer term trend direction so the way we combine these two lines is if the blue line crosses below the baseline it means you take a short position and
baseline you take a long position next we have these two lead lines or also known as the senkus bands
kumo cloud so the kumo cloud is what stands out in the ichimoku indicator because it can help filter out noises while still displaying trends usually when the price is on a trend the
cloud will also heading towards that direction for example if the price is on a strong bullish trend the direction of the cloud will also follow upwards the color of the clouds can also
trend if the cloud is colored green which is formed when leading span a crosses above leading span b this indicates that the price is on a strong upwards momentum
and if the cloud becomes a red color which is formed when leading span a leading span b it indicates that the price is on a strong downwards momentum so the kumo cloud has a couple of rules if the candle is above the cloud
if the candle is above the cloud you only take long signals only take short signals and if the candles are inside the cloud you don't take any positions
so now we combine all of them together if the price is above the clouds and the baseline you take a long position
it's the same thing with a short position when a candle is below the and the conversion line crosses below the baseline the baseline you take a short position and remember
do not take any trades if the price is inside the clouds lastly we have the lagging span or also known as the chiku span so the lagging span is optional some traders use it some traders don't
the lagging span can be used as a second confirmation for a trend for example let's say you receive a bullish signal from the ichimoku cloud the lagging span can help confirm that that is a strong bullish signal
upwards this further confirms that the price is on a strong uptrend and it's the same with downtrends as well if the lagging span is heading downwards
this further confirms that the price is on a strong downtrend so even though you already know how to use the ichimoku indicator i can guarantee that most of you will still make mistakes when trading it
because the indicator looks so messy so i suggest this indicator on tradingview by skyrock signals bearish signal appears by giving signals like this so now
it's a lot easier for us to know when to enter long or short positions you can also use the clouds to determine your stop loss for example if the ichimoku displays a
short position you can set your stop loss right below so if the price breaks through the clouds you close your position this can be used as a safety if the price reverses to the other direction
so that you can close your trade early and avoid losing a lot of money next let's talk about the different types of strategies that you can use when trading the ichimoku cloud so the first we have the baseline
crossover strategy the baseline crossover only uses the conversion line and the baseline if the conversion line crosses baseline if the conversion line crosses upwards you take a long position
and if it crosses downwards you take a short position cloud crossover so in this strategy you simply take long
positions if the price crosses above the clouds and you take short positions if the price crosses below the clouds the kumo cloud can also be used to combine with other indicators
and it can act as a baseline to see the overall trend direction for example the chicken money flow and the kumo cloud combination so you take long positions if the tchaikon money flow
closes above the zero line while the candle is still above the kumo cloud money flow crosses below the zero line and the price is still below the clouds
indicator such as the parabolic sar so actually i already traded this indicator combination 100 times in my other videos
so be sure to check that out as well so how this works is you basically take long positions if the parabolics are is below the candles while still being above the clouds and you take short positions when the
parabolic sar is above the candles while the candle is below the clouds and don't take any positions if the and don't take any positions if the candle is inside the clouds
add the lagging span to further confirm the overall trend direction displays a long position while the lagging span is heading upwards that is a good sign that the price is on
an uptrend so overall the ichimoku clouds is one of those indicators that you can easily combine with other indicators current trading strategy and my tip for you is just because a
doesn't mean that's the only way to use the indicator you don't need to follow the original rules of the indicator if you test out you may find winning techniques that you can use for a lifetime
testing process looks like you can check out my other backtesting videos as well so i just showed you the different ways implement right now and all i ask for in return is a very
subscribe to the channel it literally takes only two clicks and so thank you guys for watching and i'll see you in the next video