Like many trading indicators the cci has certain variables that can be changed depending on the trading strategy. While oversold and overbought levels were not the intention of the cci many traders in forex use those market states as the basis for a trading strategy. How does it work.
Read the full article to learn how to set up and use woodies cci in trading. It can therefore be used on its own unlike simpler indicators that require confirmation from other technical analysis tools. Woodies cci looks and feels more like a complete trading system rather than a standalone indicator.
In this article we ll use lambert s original article on the commodity channel index as a starting point. Clearly it has stood up to the test of time. Now you can find the cci as a standard indicator in most charting packages.
Donald lambert introduced the commodity channel index cci in the stocks commodities magazine back in 1980. But instead of 30 and 70 representing. Cci is a popular indicator used by forex traders to identify oversold and over bought conditions much in the same way that rsi or stochastics is used.
Lambert the indicator s workings and details were first published in a. Invented by donald r. The cci indicator short for commodity channel index is a momentum based indicator and belongs to the oscillator group of technical indicators.
The commodity channel index is an indicator used in the technical analysis of the financial and forex markets. Cci and its zero line an aggressive way to enter the market is to react to cci s line crossing its zero level. All those methods and views will be cover here.
Since 1980 when cci indicator was first introduces traders have found lots of ways to interpret cci and expand trading rules.
How to use cci indicator in forex trading. The cci was originally developed to spot long term trend changes but has been adapted by traders for use on all markets or timeframes. Trading with multiple timeframes provides more buy or. Commodity channel index cci is an oscillator introduced by donald lambert in 1980. Though its name refers to commodities it can also be useful in equities and currency trading as well.
The cci indicator strategy was really designed to find cyclical trends in the market and to be used as a bearish or bullish filter. The cci is simply an oscillator indicator that moves the majority of the time between 100 and 100. Technically the way to interpret the commodity channel indicator is that a positive reading above 100 is a bullish signal and a start of an uptrend while a. This is the second article in our cci series.
If you haven t already we suggest that you check out the first article about the cci indicator in that article we covered the background of the commodity channel index or cci indicator how it is calculated and how it looks on a chart.
If you haven t already we suggest that you check out the first article about the cci indicator in that article we covered the background of the commodity channel index or cci indicator how it is calculated and how it looks on a chart. This is the second article in our cci series. Technically the way to interpret the commodity channel indicator is that a positive reading above 100 is a bullish signal and a start of an uptrend while a.
The cci is simply an oscillator indicator that moves the majority of the time between 100 and 100. The cci indicator strategy was really designed to find cyclical trends in the market and to be used as a bearish or bullish filter. Though its name refers to commodities it can also be useful in equities and currency trading as well.
Commodity channel index cci is an oscillator introduced by donald lambert in 1980. Trading with multiple timeframes provides more buy or. The cci was originally developed to spot long term trend changes but has been adapted by traders for use on all markets or timeframes.
