CCI Indicator Explained: Best CCI Trading Strategy (Tutorial)

Published on February 4, 2022

New reviews related to Forex Tips, Successful Trading, and Stochastic Oscillator Settings, CCI Indicator Explained: Best CCI Trading Strategy (Tutorial).

In today’s Trading Beacon tutorial, we’ll be explaining the best CCI Indicator Trading Strategy. CCI, also known as the Commodity Channel Index Indicator, is very popular among traders and has a variety of uses.

So tune in for today’s video as we explain how to use the CCI indicator, as well as going over a CCI indicator strategy!

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So after you’ve added the CCI indicator to your chart, it should look something like this. You should see a coloured line moving up and down in the indicator window. And you should also see an upper band plotted at +100 and a lower band plotted at -100. So the full name of this indicator is actually called the Commodity Channel Index, but it’s commonly called CCI for short. Judging by the name of this indicator you may think that it’s only used for trading commodities, but the CCI is commonly used in many different types of markets, such as forex and stocks too.

The easiest way to understand how this indicator works would be this: The CCI measures the current price change relative to the average price change over a period of time. This means that when we see highly positive readings on the CCI, this indicates that prices are well above their average. Whereas when we see highly negative readings on the CCI, this indicates that prices are well below their average. The CCI is different to other indicators in the sense that the value of the CCI line is not bounded between a range of 0 and 100. It’s not uncommon to see the CCI reach a value of 200, 300, 400 or even greater, depending of course on the market and timeframe you’re looking at.

Having said that however, roughly 75% of the time the CCI line will remain between the values of +100 and -100. This means that when the CCI line moves outside of this area, it can often provide us with a potential trade opportunity if we know what signal to be looking for. So there are 2 main ways that the CCI indicator is used in trading the markets, with both having certain advantages and disadvantages. For the first way we’re going to look to take a trade in the direction of the overall trend. So for this strategy I have the CCI set to a length of 50, and I’m currently looking at a 4 hour chart. I would recommend sticking to the higher timeframes when using this strategy, as the signals tend to be more reliable.

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Beauty Flow by Kevin MacLeod
Link: https://incompetech.filmmusic.io/song/5025-beauty-flow
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DISCLAIMER:
Foreign exchange trading on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and, therefore, you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts. Past performance is not indicative of future results. The information presented today is not meant for use in live trading.
This video is not a recommendation to anyone on how to spend or invest their money. Take all videos as my own opinion, as entertainment, and at your own risk. I do not assume any responsibility or liability for any errors or omission in the content of this channel. This content is for educational purposes only, and is not tax, legal, financial or professional advice. Any action you take on the information in this video is strictly at your own risk. TradingBeacon.com and all individuals affiliated with this channel assume no responsibilities for your trading and investment results.

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