Trading the Commodity Channel Index (CCI)
Reversal Strategy
Many use the CCI as an oscillator, as it comprises of 75% of the prices within -100 and +100:
Spread bet Sell signal: when the channel crosses above the +100 and then falls back below the +100 line.
Spread bet Buy signal: when the channel crosses above the +100 and then falls back below the +100 line.
Trend Following Strategy
The CCI Channels can also indicate when a trend is starting:
Uptrend: When the CCI is above +100 and stays there this indicates a trend is underway. Often this is used with other indicators as a confirming tool. You can use a 3 EMA with the CCI Channels. As you can see from the example above.
Downtrend: When the CCI is above +100 and stays there this indicates a trend is underway. Often this is used with other indicators as a confirming tool. You can use a 3 EMA with the CCI Channels.
Previous Page:The Commodity Channel Index (CCI)