Long story, can't get into it here, but if you use the search engine, or google'em, I promise you'll find out everything you ever wanted to learn about 'em (for the record, I like his stuff, but there are plenty of detractors, as with everything else). Best Regards, JJ P.S. I'm not being smart, there is a ton of stuff written about'em, and it's easier to search it out.
Here's a beginning. http://www.elitetrader.com/vb/showthread.php?s=&threadid=76297&perpage=6&pagenumber=1 best jj
CCI doesnt lead price. CCI is price - 14 simple moving average (for CCI 14) divided by a normalizing factor. What CCI has going for it is that 1) because it involves price directly in the equation it doesnt have the lag caused by ma smoothing like a stoch or macd and 2) the normalizing factor can provide quite useful divergences. One bad thing is that becaue price is involved directly it wiggles more than smoothed indicators.
Hi brownsfan. Yes. You are right. What I said is that this indicator, is as far as I know, the only indicator I found on the web that is not lagging. It predicts the market path and updates it every 15 minutes. As you can imagine, it is not always 100% accurate, but I"ve been trading it for some time, and it does predict. Obviously some times, especially on announcement days, it is not very accurate, but it's something you can by pass with good money management. I've seen traders tend not to believe that markets are predictable, still there are many books and science that show the opposite. With respect to your mirror comparison, I'd like to comment one example that I read on The Predictors, by Thomas Bass, (recommended for the newbie). Basically, if your statement was correct, that you can not predict the future based on past information, lets look at a base ball path. A player's mind is always predicting the future path of the ball, based on past information (past trajectory), and places his hand in the middle and catches. He is predicting, the future path, within certain restriction. Clearly the variables that affect a linear dynamic like the ball, are simpler than the ones that affect the non-linear dynamics of the market. But that, does not make it unpredictable, it just make it unpredictable for the human mind, but not if you use computer power. For example, check this chart, is from Dec 22, 2005. This prediction was computed at 12:15 (Where the black line splits from the red.) The red line is the market, the black is the prediction. I've seen this fitting quality many times. So. What do you think, is the market predictable? I'll look for more charts and send them later. Take care. !
Check this. This is an example from 3 hrs ago. At 12:45 the system predicted the path of the market to be what the black line shows. The red line, is what it finally happened. Does the system predicts?
Update As stated, for the newbie, not all days are that predictable. Still, as a not lagging, but predictive indicator + good money management + good trading psychology you'll get a very good trading system.
dan - could you break down what I am looking at here a little better so a 'newbie' to this indicator could grasp it a little better? Thanks!