CCI or Stochastic

bschandran · February 22, 2013, 2:47am

Hi,

CCI or Stochastic – Which of the two is better???

MoneyNVRSleeps · February 22, 2013, 6:46am

I would say they are equally adaquit, and equally deceiving…

CCI is great in lower setting, I like 3
And stoch is great at 3-3-3

Yeah, not sure, but thru my time in Forex and messing with indicators, 3 seems to be the magic number…

IMO

MoneyNVRSleeps · February 22, 2013, 8:43am

I would also like to add on the CCI

When CCI bottoms out, or tops off, with a 100 for 2+ candles or a -100 for 2 plus candles, tells a strong indication that it will push higher or lower in the near future… ( 5M)

So, say the CCI is at +100 for 2 filled candles, then price drops, you can most likly grab a long on the next move up,

I think CCI is powerful…

JohnLeonard · February 22, 2013, 9:07am

I don’t think any type of oscillator can be said to be “better” than another. They are all the same to a large extent, differing only in their idiosyncracies or sensitivities. If you were to compare CCI, Stochastics, RSI and a MACD histogram on standard settings then they would all show similar things. CCI is the most sensitive to price changes. It will rarely miss a signal. The downside is that CCI will also give you plenty of false signals due to its sensitivity. At the other extreme you can look at a MACD histogram. It is a fairly accurate indicator. False signals are kept to a minimum. The downside of the MACD is that it generally confirms price changes well after the fact and the move the indicator is showing is well under way and by the time its signals appear and it is often too late to act on. Stochastics and RSI fall in the middle. They have both the advantages and disadvantages of the extremes.

My advice, if you wish to use any type of oscillator, is pick one you have a feel for (or just like to look at) and understand how that particular oscillator moves compared to price and learn what it may or may not be telling you. MoneyNVRSleeps has highlighted this. He appears to have picked up on the idiosynchracies of CCI and what it is saying.

Your mileage may vary.

brendad · February 22, 2013, 9:14am

JohnLeonard:

I don’t think any type of oscillator can be said to be “better” than another. They are all the same to a large extent, differing only in their idiosyncracies or sensitivities. If you were to compare CCI, Stochastics, RSI and a MACD histogram on standard settings then they would all show similar things. CCI is the most sensitive to price changes. It will rarely miss a signal. The downside is that CCI will also give you plenty of false signals due to its sensitivity. At the other extreme you can look at a MACD histogram. It is a fairly accurate indicator. False signals are kept to a minimum. The downside of the MACD is that it generally confirms price changes well after the fact and the move the indicator is showing is well under way and by the time its signals appear and it is often too late to act on. Stochastics and RSI fall in the middle. They have both the advantages and disadvantages of the extremes.

My advice, if you wish to use any type of oscillator, is pick one you have a feel for (or just like to look at) and understand how that particular oscillator moves compared to price and learn what it may or may not be telling you. MoneyNVRSleeps has highlighted this. He appears to have picked up on the idiosynchracies of CCI and what it is saying.

Your mileage may vary.

Very good explanation.

tomsnow500 · December 10, 2018, 2:21pm

i would echo John Leonard’s comment. it does depend on what type of trader you are, the market, timeframe etc. i’ve been reviewing all my pullback trades from 2018 and without a shadow of a doubt (without going into the numbers) if I had only taken trades where stochastic had hit 80(20) or above (below), i’d have made more money. i’ve also coded a my own momentum indicator in Prorealtime which I find useful (Tommy’s Momentum Indicator - patent pending!)

So my advice would be, record as many indicators as possible and look where the statistical edge is for the type of trading you do. Everyone trades differently, so review your trades and find the signals that resonate with your winning trades… this the path to true happiness (or at least profits)