As mentioned earlier, the Ichimoku Kinko Hyo has five different elements: Tenkan line, Kinjun line, Senkou A and Senkou B lines, and the Chinkou line. What is between the Senkou A and Senkou B lines is being called kumo, or the cloud, and this is the famous Ichimoku cloud.
In a rough translation the Ichimoku Kinko Hyo means “equilibrium at a glance”, and the whole indicator is actually representing a balance between future and past price structure. If history is a good indicator regarding future price movements, then this indicator is one of the best tools to be used for that.
The balance comes from the fact that, compared with the actual price, the cloud it is projected forward 26 periods (basically the Senkou A and B lines that make up the cloud) and the general interpretation is that the cloud should offer support when price is testing it from the upside, and resistance when price is testing it from the downside. Both Senkou A and B individually should act as support/resistance area as well. The Kinjun and Tenkan lines refer to the current price action (in time), while the Chinkou represents the current price levels shifted 26 periods back in time.
So that gives us three periods of time if I may say so, current price, price shifted 26 periods back in history and forwarded 26 periods into the future. The balance, or the equilibrium, is being represented by the fact that price is finding a balance in a 52 candles range.
The recording that comes with this sub chapter shows you classical interpretation on the indicator, and what to look for in order to identify shifting in market sentiment.