Effective forex trading strategy for CCI
What is the fundamental factor for deciding to start a currency move for most professional traders in the Forex market? The answer is unambiguous - divergence of indicators. And the most effective forex strategy that tells the trader about the possible rollback in the price of the currency pair and the reversal of the currency movement in a certain short period of time is the CCI Divergence Trend Line divergence indicator.
It 's one of the best strategies to show up at various intervals. But it is best used at М15 and above. The formula of the CCI indicator is the indicator of the signal that follows the trend, in case of too much difference between the last price and the moving average. Price variance, which shows the CCI indicator and what is shown in the graph and there is divergence. It shows the minimum price sequence with the successive maximum displayed on the graph. And vice versa.
What needs to be done when entering the market according to the rules that the forex strategy established on CCI? If the price difference is high enough, the trend is considered set and the CCI indicator follows the trend. Most commonly, a strategy is used when the CCI indicator crosses a zero mark or level with marks (100) (-100). Note the features of the CCI indicator:
1. If it grows very fast between 0 and 100, it means a lot of trend strength.
2. Conversely, a rapid drop in the indicator, once 100 has been reached, shows a fall in the trend. And at this point it will be better to stop to protect revenues.
You can use monthly CCI indicators, weekly indicators, and daily indicators.
- The monthly indicator allows you to set a specific period during which entry and exit periods are set. This allows you to choose the most effective strategy.
- The weekly indicator works in the same way as the monthly indicator. That is, it is necessary to leave when the CCI indicator shows a peak, and the alternative reports a decrease in the trend.
- The daily indicator has one very significant disadvantage - it is slow, and for this reason misses the beginning of strong trends, which is a negative factor in trade in volotil and fast markets. In order for forex markets to trade successfully using the CCI indicator, it must be combined with other indicators such as ADX.
The CCI indicator helps to correctly assess market trends. Trending forex strategy on CCI gives maximum effect where the CCI indicator spikes gave multiple protrusions in one direction beyond mark 100. In order to avoid jerking of the CCI indicator of the fast period, it is necessary to use the technique of waiting for confirmation. What is it?
Let 's say the indicator forms studs after mark 100 (in any direction). Before you take any step, it is best to wait until the confirmation signal arrives. That is, wait for the market to close the price at a higher level. At the same time it is possible to avoid unnecessary twitching of indicator and to get more progress. To buy a currency, the trend in the selected time interval must have a downward direction.