CCI Indicator

Discussion in 'Technical Analysis' started by VisionTrader, Aug 30, 2003.

  1. Does anybody use this trade the ES and YM?
  2. nkhoi

    nkhoi Moderator

  3. I use it to trade the ES...mainly for divergence trade setups.

  4. Sashe


  5. I am familiar with e-minitraders. I would like to know if anyone here at ET is using this indicator successfully.

    Does anyone use this differently than the way Woodie teaches?

  6. Any chance you could be a little more specific. For example, do you requre the divergence to occur over 100, etc.
  7. Hi Vision,

    Currently, I don't require it to be above +100 for Bearish Divergence nor below -100 for Bullish Divergence.

    I wasn't specific because I thought you wanted to know if anybody was applying the CCI to ES or YM...

    as if you wanted to know if anyone thought it was worthwhile using CCI on the minis in comparison to another indicator that traders tend to favor on the minis.

    Simply...I like CCI a lot...I posted in an earlier thread awhile back that I was just starting to use it as a trading tool in real money far its profitable.

    Prior to that...I used it in a realtime simulator for many months with less than desirable results mainly because I was still learning its strengths and weaknesses (I am still learning).

    (Note: My realtime simulator results didn't improve until the last 2 months of simulatior trading as I integrated it into my normal methodology...enough for me to venture into real money trades via the CCI)

    One of its strength's is Divergence...

    One of its weakness is those small peaks in between the Divergence peaks (do your homework on this).

    However, divergence is subjective because every trader has a different interpretation of when prices is diverging from the CCI...

    or different opinion of what divergence is...

    this is apparent in all those charts at many of the online sources you've most likely have already visited...

    no right or wrong...

    It's just a matter of what works for your trading style and what doesn't.

    Also...I notice some traders use the CCI via trendline breakout/breakdown setups.

    This I haven't tested and most likely won't because I'm more of a divergence type of trend reversal trader.

    Here's the key...don't use CCI by itself as with any other indicator.

    (I tend to have problem trades when I use CCI all by itself...something that became apparent as expected in the earlier months of the realtime simulator trades)

    Use a filter as in another indicator or price action only method of an index or something like candlestick analysis to verify anything the CCI is saying...

    Do your around with the above.

    Something else...if your not comfortable with divergence setups as a trend reversal trader...

    stay away from the CCI indicator or instead test it via those CCI trendline breakouts/breakdowns setups.

  8. nqoos


  9. gbennett


    --Currently, I don't require it to be above +100 for Bearish Divergence nor below -100 for Bullish Divergence.--

    I quite agree with your divergence method. The lines I like are +85 / -85....I also use %R to help; and I set those lines at 25 /75. But volume is always takes center-stage whether you're looking at tick, 3min, etc....
  10. mg_mg


    1. Use CCI as an entry tool: enter when there is a divergence with the trend;

    2. Don't use regular divergence as an indication of trend reversal;

    In all, the key to use CCI properly is to know the TREND first. Woodie uses time as a factor to define the trend (5 or 6 bar crossing zero-line); Fitzy40 uses 34ema to defined the trend. For me I simple use Dow theory: either a new high or new low.

    With the trend defined, you are waiting for entry signal which can be divergence in CCI or trendline break of CCI with the trend.
    #10     Sep 11, 2003