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CCI Buy / Sell Signal

CCI Buy / Sell Signal

Commodity Channel Index (CCI) Commodity Channel Index (CCI) quick summary: Commodity Channel Index (CCI) is a versatile indicator that can be used to identify a new trend or warn of extreme conditions. Lambert originally developed CCI to identify cyclical turns in commodities, but the indicator can successfully applied to indices, ETFs, stocks and other securities. In general, CCI measures the current price level relative to an average price level over a given period of time. CCI is relatively high when prices are far above their average. CCI is relatively low when prices are far below their average. In this manner, CCI can be used to identify overbought and oversold levels.

    • CCI measures the current price level relative to an average price level over a given period of time.
    • CCI can be used to identify overbought and oversold levels.
    • CCI above 100 level it’s overbought.
    • CCI above -100 level its oversold levels. How to trade with CCI:
    • A basic CCI strategy is to watch for the CCI to move above -100 to generate buy signals.
    • Move below +100 to generate sell or short trade signals.
    • Exit when the sell signals occurs and then re-invest when the buy signal occurs again.
    • The strategy does not include a stop loss
    • When buying, a stop loss can be placed below the recent swing low;
    • When shorting, a stop loss can be placed above the recent swing high.
    • Don’t short when trend is up
    • Don’t long when trend is down
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Posted on

February 2, 2019

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