Cloud charting is the second Japanese technique I have incorporated into my method. Ichimoku Kinko Hyo—the correct name for cloud charting—was invented by a Japanese journalist, Goichi Hosoda (1926-1983), who wrote under the pseudonym Ichimoku Sanjin. (The Chinese characters that make up his name translate roughly as “at one glance…of a man standing on a mountain.”) On the Bloomberg terminal, cloud charts are called General Overview Charts (type in an instrument code and then GOC), which gives a much better feel for what these charts can do. The method was revived by Hidenobu Sasaki (1950- ) who updated it in the very successful book Ichimoku Kinko Studies (Toshi Raider Publishing, 1996). For the mathematically minded, or for those who would like to set this up on a PC, the formula for the different lines is detailed in Figure 3.2, page 45 of the book. For those like me with a pathological fear of algebra, whose eyes glaze as soon as they see a Greek letter, we shall work through step-by-step in plain English how these charts are set up and how they work. (Also, remember that the Bloomberg terminal will draw all the lines for you.)
