I trade DAX, so my example will be on this market, but it is applicable to any. Just bring up 144 constant volume chart, then look at price action with and without CCI. Which one is easier to interpret? I use constant volume bars because they represent price action in its purest form. Fixed time fractals on other hand distort the picture.
Red, In my opinion, price itself, which is why I requested an example. I do agree about the CVBs though. Anek
Anek, I can easily post here charts, but like I said just bring up any chart. Then look at price action and try to see if CCI will help you to see easier when momentum changes from bullish to bearish and wise versa. Regards, redduke
Here's a raw chart using the CCI Histogram. For some it might work, but I never could get it to work consistently, and I believe that if a trader puts their attention on studying price action they will much more readily know how to trade the markets successfully. But if it's working for you, by all means, please continue to use it.
I studied technical analysis for some 8 years now, the last 3 daytrading forex. In that time i have found little that works except; price action, the price refering consistantly to some moving averages, and Woodies cci. Woodies is something for some reason i keep coming back to. At first i couldnt believe it but over time it has sunk into my consciousness, and now seems all really rather obvious. I am not brave enough to get rid of the price, though we doubtless would all be better off it we did. Rather i use the chart window for some moving averages to define suport and resistance and price action. When Woodies and these reference points coincide the chances of success are greater. Willy nilly trading of Woodies without the price is always going to be an uphill struggle and one i wouldnt suggest. What is perhaps not touched on enough in forums by successful traders is the wealth of background knowledge they posess. Born of years of trading experience and screen time which underlies what they do. Taking such methods at face value and dismissing them is to miss the point of trading and of learning. Best wishes. napeharm
Hi Napeharm, You should not get rid of price. One of the reasons is becuase if you get a cci signal, let's say zlr, but the price bar is very long, you better not take it. There is a good probability that the price will go in opposite direction, at least temporarily. Price action is an excellent filter when properly applied with cci patterns. If you just look at cci without price, you would miss such things. Regards, redduke
When i began using moving averages as support and resistance and for touches and price targets i never quite believed what i was seeing. The same was true of Woodies when i first encountered it. That leap of faith required in trading was absent. However, since i realise that the price is on balance likely to do what i believe it will, Woodies gives me the confirmation as well as the entry timing for the trade. In other words, i believed in neither method/understanding so completely to use either on their own, yet together seem to give me the necessary conviction to act. In other words Woodies works better for me in context, which is the salient word here. One aspect of understanding colluding with another, everything coming together. Even entering late is not necessarily a concern because i believe i know where the price is heading etc. Also i find price action by itself difficult to enter, and Woodies defines entries. Further, Woodies is also a very visual method which suits me, i need to see stuff in front of me, its what i respond to. (Appologies for typo's and grammer, i am very tired this morning!) napeharm
Hi RedDuke, Quite so, the price and its reference points add invaluable information to the decisions which can be made using Woodies. Its a kind if interaction, something which takes practise, and in my mind in recent times has become quite abstract. I guess years of trading education gives you a virtual model of the price in your mind which is being constantly polished. Nowadays when i use a moving average, i dont actually use it in the sense many try to. I just watch it, see what happens and how the price forms around it, and maybe i take some notice of it, maybe not. Etc. Its abit Zen i guess. But its far from the literal way i tried to use TA. when i first studied it. Its now more about holding many things in my mind, whilst still retaining the ability to act. Woodies is an important part of that and i find those dismissing it out of hand as missing the point. napeharm