whether it's woodies method, etc... for those that uses and profits CCI, do you use the CCI alone or what other indicator do you use along with it? For example, if in a trending stock, besides being patient and let the trend playout, I would look to watch bollinger bands for an idea where the trend might start to reverse to transition.
Woodie is a savvy old time trader that probably doesn't realise his success is due less to CCI than to experience, otherwise everyone using his method would have his success
I use the CCI(14) along with RSI. The CCI gives a good indicator of when I should get in or out when looking at a new High or Low on the daily charts. I will trade a call credit spread if the stock has made a new high in the past 4-6 months and the CCI has had a new high above +200 and the RSI must be above 70. Do the same on the down side. If a stock has bottomed out at a major support, I wait for the CCI to start a climb up from below -200 area. Look for the RSI to be below 30 also. I will use a put credit spread there. Also I have used this point to look for a good ITM LEAP to buy. Will then use this as a covered call once the stock has moved about one strike level. I have seen a couple times when the CCI is climbing back up, and rejects the Zero Line, usually the second attempt it will break thru.
check out goinglite charts http://www.elitetrader.com/vb/search.php?s=&action=showresults&searchid=1399130
I mainly uses it for equities but yes, it is the "commodities" index so it should be versitle. I combine it with full stochastics as if cci is making a move but the stochastic is already oversold, I would not short it. vice versa.
trader28 is right, Woodies system is much less dependant from CCI than from basic trading principles (let the profits run, cut losses short) which Woodie strictly follows. I attended his seminar this summer and saw with my own eyes how he makes his money. He actuylly does, but as I said it's because he does the right things, not because he uses CCI.
Best CCI trader I know.....I am in his chatroom everyday and he is pretty good imo (he is my broker)............ http://www.madscalper.com/vt.htm
Just a thought against the cheerleading grain on this one: I'd like to put all these CCI mentors and their methodologies against a computer programmed with the same and see where the performance divergences are. I've yet to see a verified succesful CCI backtest much less a successful CCI trader. Just my $.02
I personally do not care for the CCI and I do not use it......but I in no way condemn those that use the CCI or assume that they can not make profitable trades.
I'm not assuming. I've spent the time and energy to test it and observe Woodie's room in particular over the years. Personally, I view it as a public service to debunk snake oil for newer users when it shows up. Please note I am aware you said profitable trades. Let's not split hairs here inadvertantly. What we are talking about trying to achieve is a profitable methodology. Anyone can make selectively profitable trades for some period of time. It's the overall result that counts. That's where the CCI "method" falls apart and where many newer traders get seduced by the dark side.