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Good morning all.
today I will speak a bit about CCI's and how you can use them to help identify trend direction, overbought & oversold levels and how to use the trigger to get you into some great trades.
On a 60m chart I use a 21, an 84 and a 5 as my trigger.
By using all these in conjunction with one another you only really need to look at the one chart. However, for novices starting with minimal stakes the stop losses can be rather large so we use a 5m chart for entry.
This 5m chart has a 63 and a 4 CCI as my trigger.
On all CCI's we use a 150 and 200 level to show the overbought/oversold regions. If the price is between these levels it's dangerous to trade so we are always looking for long plays IF the 21/84 are above 0.0 and below 150 or short plays IF the 21/84 are below 0.0 and above -150.
The 21CCI is pretty much a measurement of where the price is in relation to the 20 moving average, with the 0.0 centre line representing that 20 moving average.
It works very much like a MACD or a Stochastic or an RSI and is a momentum indicator.
The 84CCI on the 60m chart is my 4hr 21CCI (21 x 4) and novices should always follow the direction of this indicator when taking a trade.
If you try to outsmart this CCI you will often come unstuck as retracements against the trend can be unpredictable at times, so bear that in mind and play WITH the trend.
My Trigger on the 60m chart is the 5CCI which is approximate to the 15m 21CCI giving a 15m entry on a 60m chart following a 4hr trend.
Once this trigger agrees with the 21/84 that's when we switch to the 5m chart for an entry.
The 5m Chart has a 63 which is my 15m trend (same as 60m trigger) and 4 which is my trigger. This 4 is my 1m 21CCI
Therefore, with the averages as they are, going up to 4hrs, this strategy allows you to play a 4hr chart set-up with a 1m entry just by looking at 2 charts.
It's very powerful but must be treated with respect. Not every cross of the 0.0 is a valid signal and not every signal on the trigger is valid.
I will show you how to use these in more detail in the lesson about set-ups and entries but for now just take these CCI's and have a play.
Notice how the CCI crosses and the price moves accordingly.
Next up is Pivots
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I will spend more time later on the trigger but wanted to give you a little head-start so you can go and do some homework and see what I mean.
Once the trigger on the 60m has crossed the 0.0 centre line and is agreeing with the 21 & 84 you can swap the 60m chart for the 5m
The 63 on the 5m is the same as the 5 on the 60m so pretty easy to understand.
Once everything is agreeing you must wait for a little retracement on the 4CCI on the 5m chart before entering.
This is especially true with breakouts and will help prevent getting caught-up with false signals.
The snap-shot demonstrates this.
The Trigger on 60m chart crosses during the 1 AM candle but its not clear at this point whether the break is confirmed.
However, upon closer inspection of the 5m chart we can clearly see all the moving averages nicely bunched and in correct order.
The 63CCI remains in negative, the trigger retraces back up to plus 100 and then turns back round and crosses the 0.0 with the break of the support trendline.
A relatively simple trade netting almost 400 pips !!
__________________ I'm now sending trading notes out twice a day with videos too. Have a look HERE.
There's one set at 6:30 UK time for London and one at 12:00 for U.S session, plus I will send a summary video after each session
Thanks for your setup info looks really cool,
Just checking if I have the CCI settings right.
I am using the FX Sniper's T3 CCI.mq4 it has 3 settings
So for the 63cci on the 5m chart I have:
CCI_Period = 63;
T3_Period = 1;
b = 0.618;
It doesn't look exactly like your 63cci so I am worried I have the wrong settings or am using the wrong indicator.
I will spend more time later on the trigger but wanted to give you a little head-start so you can go and do some homework and see what I mean.
Once the trigger on the 60m has crossed the 0.0 centre line and is agreeing with the 21 & 84 you can swap the 60m chart for the 5m
The 63 on the 5m is the same as the 5 on the 60m so pretty easy to understand.
Once everything is agreeing you must wait for a little retracement on the 4CCI on the 5m chart before entering.
This is especially true with breakouts and will help prevent getting caught-up with false signals.
The snap-shot demonstrates this.
The Trigger on 60m chart crosses during the 1 AM candle but its not clear at this point whether the break is confirmed.
However, upon closer inspection of the 5m chart we can clearly see all the moving averages nicely bunched and in correct order.
The 63CCI remains in negative, the trigger retraces back up to plus 100 and then turns back round and crosses the 0.0 with the break of the support trendline.
A relatively simple trade netting almost 400 pips !!
Hi Zac,
If you look at the GBPJPY H1 chart you posted, in particular the red vertical line at 01:00.
On my data feed, the value for CCI(84) at that point was about -175.
Does this mean you would ignore this trade or do you only look at CCI(21) for overbought or oversold conditions?
Thanks for your setup info looks really cool,
Just checking if I have the CCI settings right.
I am using the FX Sniper's T3 CCI.mq4 it has 3 settings
So for the 63cci on the 5m chart I have:
CCI_Period = 63;
T3_Period = 1;
b = 0.618;
It doesn't look exactly like your 63cci so I am worried I have the wrong settings or am using the wrong indicator.
Thanks
We don't use the T3 version so cannot comment I'm afraid.
We use FXSniperCCI.exe
__________________ I'm now sending trading notes out twice a day with videos too. Have a look HERE.
There's one set at 6:30 UK time for London and one at 12:00 for U.S session, plus I will send a summary video after each session
If you look at the GBPJPY H1 chart you posted, in particular the red vertical line at 01:00.
On my data feed, the value for CCI(84) at that point was about -175.
Does this mean you would ignore this trade or do you only look at CCI(21) for overbought or oversold conditions?
Thanks.
Great thread!
Here's a snippet of all 3 CCI's at time of entry. Although the 84 was borderlining you'll see it was around -150 or thereabouts. The area between -150 and -200 is more dangerous than say -80 but it's still possible.
Do not trade short at -200 and use reduced stakes in the region between both levels
I hope this helps.
Today's lesson coming up shortly will focus on Pivot points and some little tricks to get the most from these indicators.
__________________ I'm now sending trading notes out twice a day with videos too. Have a look HERE.
There's one set at 6:30 UK time for London and one at 12:00 for U.S session, plus I will send a summary video after each session
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