Before we proceed with discussing some of the ways to use CCI Indictor, let us have first a brief introduction of what this indicator is all about. First, indicators are tools in the forex trade to measure the volatility, trend, movement, or predict the direction of the forex market. The CCI or Commodity Channel Index indicator is one of these tools. This is one of the most popular indicators used by the traders in their daily trading lives. Without much of understanding about the CCI indicator, a trader, especially a beginner in the world of forex trading, will not be able to use the indicator to its full potential and obtain the best results possible. But if a trader knows how to control the CCI indicator, this will give him big advantages and have great impact on his trading career. The CCI or Commodity Channel Index Indicator was developed by Donal Lamber which is used to identify the bullish and bearish market cycles as well as to define the market turning points and the market’s weakest and strongest period. This was originally created for the commodities but later found a very significant role in the forex market. Usually, the CCI indicator is used for predicting the entry and exit levels for a trader to enter or exit the market. There are principles to follow when using the CCI indicator. When CCI moves above +100, then there will typically be a strong uptrend and is a signal for traders to open a buy position. And on the other way around, when the CCI moves below +100, it is time for the traders to exit the market. In identifying the price, the typical price will result with the formula of the quotient of the sum of quantity of High, Low, and Close, and 3. Get the value of the Mean Deviation of Typical Price and SMA of TP for the 14-bars and apply the formula:
CCI = (Typical Price – SMATP)/(0.015 * Mean Deviation)
There are three methods of in solving this; the first method (Method1) is the Woodies CCI Zero-Line_Reject which incorporates the CCI indicator in Woodies CCI which was developed by Ken Wood. The next method is the (Method2) trading with the CCI indicator based on the zero-line that applies rules such as buying when CCI crosses its zero line from below and sell when CCI crosses its zero line from above. And last but not the least, the third method (Method3) that also uses other indicators besides the CCI indicator. Incorporating other software or indicators with the indicator that you use will most likely give you a better result.
- CCI EXIT mq4
- secret forex trading method using CCI