Indicator CCI, which will be referred to, quite popular among traders. It includes all programs of technical analysis and is mentioned in almost all benefits of open trade. But the capacity of CCI in the design of trading systems and combinations with other indicators still have not yet been fully explored
General CharacteristicsAny trader knows that the acronym means CCI Commodity Channel Index, that translated into Russian language sounds like a commercial channel index (other names - the index of trade channel, channel index points). This indicator is a normalized oscillator moment, built according to the formula:
where T (Typical) = (High + Low + Close) / 3,
MA (T) - n-periodnaya moving average of T,
D = 1 / n * SUM i = 1 ... nl Ti-MA (T) l - the average deviation from the average price.
Sami indicator developers and most authors of textbooks are regarded as signals CCI crossing lines 100 and -100. In this case, the signal for the opening of the long position is the intersection of the indicator marks -100 from the bottom up, as a signal for the opening short position, the intersection of the indicator mark 100 from top to bottom, as shown in Figure 1. That is, we trade on the classical oscillator.
There are "alternative" interpretation of the indicator. According to this interpretation, the position can be viewed not from the lines 100 and -100, and from the zero line. Consequently, the crossing point 0 from the bottom up is a signal to buy, top-down - a signal to sell. Practice has shown that such a trading system makes sense for the market trend, where the oscillators are not appropriate.
SimpleTo get started, build a very simple trading system based on the CCI indicator crossing zero. The position will be opened after crossing the line indicator of the zero line: a long - at the intersection up short - at the intersection down accordingly. The closure will be on lines 100 and -100: long positions are closed at the intersection of CCI through 100 top-down, short - when crossing the line -100 upwards. In fact, it is a full trading system, set up only one indicator. The only drawback is its lack of foot, but to this subject we will return.
ConclusionWe should not harbor illusions that by applying all of these systems in real time can be guaranteed to earn the specified number of points, not less. CCI - the indicator is quite cranky. If the test had to deal with retrospective market, in other words, its a static image, in real time before you have been locked at a value of, the curve is an indicator can often describe the steep turns.
CCI can react to the slightest changes in the market and give false signals. The program of technical analysis will fix them dispassionately. If, for example, after crossing the line Stochastics reverse process is unlikely to happen, then the curve is the channel index commodity may fluctuate around the critical point for the whole day. In order to verify that the signal was not false, it is necessary that the graph has passed 2 more candles or bars.
CCI: Rules for Traders1. Open a long position when the CCI exceeds +100%. Close when the index falls below 100%.
2. Open a short position when the CCI falls below -100%. Close when the index rises above -100%.
Rule of zero (Zero CCI) for traders of risk1. Buy at the intersection of top-level index of zero CCI.
2. Sell down while crossing the zero level. From V. Meladze
"The course is technical analysis"
Download Indicator below for Meta 4 Platform. Set 3 level ie 0, 100 and -100.
CCIFor Marketiva Platform Indicator already built-in a platform.
Happy Trading.
