when leading span a is rising and above leading span b this helps to confirm the uptrend and the space between the lines is typically colored green when leading span a is falling and below leading span b this helps confirm the downtrend the space between the lines is typically colored red in this case 
traders will often use the ichimoku cloud as an area of support and resistance depending on the relative location of the price the cloud provides support resistance levels that can be projected into the future this sets the ichimoku cloud apart from many other technical indicators that only provide support and resistance levels for the current date and time traders should use the ichimoku cloud in conjunction with other technical indicators to maximize their risk adjusted returns for example the indicator is often paired with the relative strength index rsi which can be used to confirm momentum in a certain direction it s also important to look at the bigger trends to see how the smaller trends fit within them for example during a very strong downtrend the price may push into the cloud or slightly above it temporarily before falling again only focusing on the indicator would mean missing the bigger picture that the price was under strong longer term selling pressure crossovers are another way that the indicator can be used watch for the conversion line to move above the base line especially when the price is above the cloud this can be a powerful buy signal one option is to hold the trade until the conversion line drops back below the base line any of the other lines could be used as exit points as well the difference between the ichimoku cloud and moving averageswhile the ichimoku cloud uses averages they are different than a typical moving average simple moving averages take closing prices add them up and divide that total by how many closing prices there are in a 10 period moving average the closing prices for the last 10 periods are added then divided by 10 to get the average notice how the calculations for the ichimoku cloud are different they are based on highs and lows over a period and then divided by two therefore ichimoku averages will be different than traditional moving averages even if the same number of periods are used one indicator is not better than another they just provide information in different ways limitations of using the ichimoku cloudthe indicator can make a chart look busy with all the lines to remedy this most charting software allows certain lines to be hidden for example all of the lines can be hidden except for leading span a and leading span b which create the cloud each trader needs to focus on which lines provide the most information then consider hiding the rest if all of the lines are distracting another limitation of the ichimoku cloud is that it is based on historical data while two of these data points are plotted in the future there is nothing in the formula that is inherently predictive averages are simply being plotted in the future the cloud can also become irrelevant for long periods of time as the price remains way above or way below it at times like these the conversion line the base line and their crossovers become more important as they generally stick closer to the price 