The original title of this article is “Commodity Channel Index (CCI) Indicator Autopsy”, but considering the content, I came up with a more appropriate title as written below… Enjoy… :57:
Forexguy.com Article Identifying Overbought/Oversold: CCI way vs. Price Action Way.
It’s that time again where we rip open another indicator and see how it ticks and try to convince you that they don’t work. It’s time to shake off the mentality that an indicator can show you reliable entry and exit signals.
This time we have an indicator that is so boring it’s actually interesting.
The CCI was developed by Donald Lambert and featured in the Commodities magazine back in 1980, yes it has been around for a while. Although this indicator was developed for the commodity markets, traders now use it in all financial instruments, including Forex trading.
The CCI indicator is a popular indicator which you will find included in most charting packages and I personally know a few traders that use this to find divergence in the market and trade it.
Interesting read this, I have never used the CCI and surely after this wont be anytime soon
I am sure there are many traders who liek to see what this thing has to offer
As for me it is not my cuppa
GLOSSARY:
[ul]
[li]OP: Open Position
[/li][li]TP: Take Profit
[/li][li]SL: Stop Loss
[/li][li]GPpL: Gross Profit per Lot
[/li][li]GLpL: Gross Loss per Lot
[/li][li]RRR: Risk Reward Ratio
[/li][/ul]
END RESULT & COMMENTARY (if any) TP has been hit.
It’s been a while since my last trade. Market had been bulling its way up due to Crimea Crisis, they said. While the fall of Gold Price yesterday was due to outperforming US industry data, they also said, which was not even considered as High Impact News. Making me don’t trust fundamental analysts and news even more.
The psychological sensation of yesterday’s trade was very unsettling for me. Within Europe session (and beginning of US session), Candles went red and green intermittently in the hourly chart. It even showed sign of reversal to go up at the end of Europe session, but then it started to fall onward.
Alhamdulillah that my TP of this trade had been hit eventually .
Allah knows best. :21:
Another useful intermezzo while waiting for the next signal I hope.
I’m currently testing a trading system based on MACD and Inside Bar as discussed in the article below. I’m hoping this would be suitable for Gold Trading. You’re welcome to test it yourself.
Technical analysis to predict price action in the financial markets is just another factor used to put the odds in favor of the trader. But relying on any single indicator to provide signals for a trade is not advisable. Since indicators derived from price action are lagging indicators, they confirm a signal only after the move has been initiated.
If another factor confirms the same signal, the probability of a successful trade is increased. The second confirming factor could be another indicator, but ideally the price action should confirm the signals shown by the indicator. In this regard, candlesticks are found to be very effective. We will look at a system combining the MACD indicator with a candlestick ‘Inside Bar.’
Notes:
[ul]
[li]The system is simple but it is only suitable for traders who are financially comfortable to trade using 4H chart or above.
[/li][li]To identify an Inside Bar pattern, I use two indicators that can be downloaded freely here (Inputs: tf: 1440) and here (Inputs: default). Each highlights the pattern in different ways (you’ll see). Both were made by different authors. So I use them as confirmation to each other.
[/li][/ul]
No point using the MACD, I have made a video on youtube pointing out why the MACD is BS and Price action is boss. You need to learn how to identify trade-able inside bars, and the best place to trade them from, once you master this, you won’t even need you’re fib henry Zones spread sheet to get signals from
Usually, a nice way I like to trade IB’s is after a trend line break, then an IB forms under the TL, set an order for the break of the low and target where you think it will hit or use another method of finding targets
Also if you are going to try and trade IB’s on H1, good luck lol
[QUOTE=“adamjn;613274”]No point using the MACD, I have made a video on youtube pointing out why the MACD is BS and Price action is boss. You need to learn how to identify trade-able inside bars, and the best place to trade them from, once you master this, you won’t even need you’re fib henry Zones spread sheet to get signals from Usually, a nice way I like to trade IB’s is after a trend line break, then an IB forms under the TL, set an order for the break of the low and target where you think it will hit or use another method of finding targets Also if you are going to try and trade IB’s on H1, good luck lol [/QUOTE]
+1
I understand the allure, but I’ll never understand why traders try to focus so much of their energy on candle stick signals, rather than trying to read context and get in at levels.
Placing trades off levels offers higher reward, lower risk entries.
Candle signals are powerful indeed, but, entry will always be sub-optimal.
Pinbars, engulfing bars, whatever bars just seem like an easily marketable way for someone to learn to trade. Not much effort is needed to spot a Pinbar. But, to analyze a pair across multiple time frames to read what’s happening is a bit more challenging and time consuming. People nowadays want everything hand delivered to them in a nice neat simple package.
Just my opinion, but I hope there are some out there who can see my point, and potentially maintain the same feelings.
I’m not trying to knock anyone or their strategies personally.
Good luck with your ways of trading, Guys… All the best to you all… :57:
Btw, your way of [B][U]alluring[/U][/B] newbies to check out your profiles or your website by showing them as if you are Trading Gurus has been superbly played. I must salute you for that. :35: I’m sure you’ve been gaining extra views by now. I’m just glad my thread can be of some help. But I don’t know how the Admin Pipstradamus will see this though.
[QUOTE=“Wibie G;613323”]Dear @adamjn & @forexunlimited, Good luck with your ways of trading, Guys… All the best to you all… :57: Btw, your way of alluring newbies to check out your profiles or your website by showing them as if you are Trading Gurus has been superbly played. I must salute you for that. :35: I’m sure you’ve been gaining extra views by now. I’m just glad my thread can be of some help. But I don’t know how the Admin Pipstradamus will see this though. Cheers.[/QUOTE]
Thanks for the plug
What someone does or doesn’t do after reading any of my posts is of absolutely no importance to me.
I sell nothing and wish to profit only from the market and in helping others rid themselves of what I feel is a freshmen-approach to trading.
I’m beyond passionate about it, and actually get quite frazzled when I see newer traders falling victim to “professionals” whose main tactic to enter the market is a candlestick signal.
Again, speaking generally here, not about specifics.
Yes our posts may have been a bit selfish, but we’re being honest at least.
I’ll retreat for now unless you’d like to debate anything I said
Lol, what website? I got no links, nor does ForexUnlimited…
Tbh, I don’t really care if “newbies” like yourself check out my profile, it contains no links, I don’t even have a website for my trading business…
Also, I am no Guru, I am a successful trader who occasionally checks out forums to fill spare time as I only trade H4 and Daily.
All I said was the MACD is of no real use if you learn to read price action and trade signals from the correct areas, I suggest you be a little more polite to people and stop acting like you are king of the world. Maybe taking opinions from other people every once in a while will help your trading.
So, overall, step down a peg, learn to take advice, maybe try and give price action a shot, as you won’t regret it and good luck with your “business”… lol
I trade using price action signals, but I mainly trade IB’s. I also only take trades with at least 1:2 Risk:Reward (Which Wilbie seems to not know about…)
But anyway, yeh, I only trade these signals from certain levels, not all price action signals/pin bars/engulfing candles are tradable, you have to understand the momentum behind the move, where price is, what level it is reacting to, trend, profit levels and so on.
I think that touch trading carries a little more risk, but then again, I have never looked into it.
“My other thread has proofed that giving out free signals lead to poor results because a lot of people started using it, and in turn big banks started chasing our SLs before eventually hitting our TPs. Hence, the ironic reality in the end was no users of those signals had benefited financially from the well-intended effort.”
I got few hundreds pips because my Sell Trigger was hit (from a different system).
Don’t worry about it. We can’t expect to catch every big move.
There’ll endless more to come.
[QUOTE=“Wibie G;613666”] Hi Icequebe, I got few hundreds pips because my Sell Trigger was hit (from a different system). Don’t worry about it. We can’t expect to catch every big move. There’ll endless more to come. Cheers… :44:[/QUOTE]
As I said FOREXunlimited, it’s from a different system.
Charts I upload here are only the results from the OHLC-based signals or anything related to them.
