The CCI Strategy Trading System For MT4 is based on the Commodity Channel Index indicator, a built-in trading tool in the MetaTrader 4 platform. This trading strategy uses multiple CCI values so that we can observe the market from a different angle. Ultimately, this trading method is applicable in every trading assets in the forex market and can provide profitable trades in both bullish and bearish market condition.
How CCI Works In Forex?
The CCI is profitable in any pairs in the forex market, and many traders use this indicator in their analysis.
The CCI compares the average price and the current price within a timeframe and fluctuates above or below zero.
It shows in a separate window in the price chart and shows the strength of the trend by moving bayond the +100 or -100 level.
The +100 and the -100 are extreme CCI levels where above +100 indicates strength in the trend where -100 points indicate correction in the trend. Therefore, we will seek to buy or sell trades when the CCI value moves above the +100 level to follow the trend’s strength.
In forex trading, we usually anticipate the price. Therefore, we should focus on multiple conditions in every trading method. In the CCI Trading strategy, we will use multiple values of CCI to ensure the trading accuracy.
The CCI Strategy Trading System For MT4
In the CCI Strategy, we can find a reliable price direction by using multiple indicators. Before moving to the exact trading strategy, we will see the list of indicators:
- Commodity Channel Index (CCI)- value 8
- Commodity Channel Index (CCI)- value 14
- Simple Moving Average (SMA)- value 5
- LSMA RNP 21
Now we will see the price chart including these indicators to see how the chart looks like:
The CCI 8 shows the market momentum based on the last 8 candle’s price action on this method. In CCI 8, we can define the price action, comparing the current price and the average price of the last 8 candles.
On the other hand, the CCI 14 provides the price direction, comparing the current price and the average price of the last 14 candles.
- The CCI 14 will represent the long term trends strength in the price.
- The CCI 8 will represent the long term trends strength in the price.
When both indicators show the same direction, we can rely on the price direction. However, we should focus on proper trade management rules in both bullish and bearish market conditions to get the market’s ultimate output.
Bullish CCI Strategy Trading System
The bullish trading method is suitable for all currency pairs in the forex market. Therefore, you can apply this strategy to all major, minor, cross, and exotic pairs, including the EURUSD, GBPUSD, USDJPY, or USDCAD.
However, major currency pairs have higher liquidity and lower volatility, so trading on major pairs is most profitable.
On the other hand, this strategy applies to any timeframes from 15 minutes or above. Therefore, you can perform day trading, scalping, swing trading, and position trading with this system.
Conditions For Long
- CCI 14 is above the +100 line, indicating that the long term bullish trend is strong.
- CCI 8 is above the +100 line, indicating that the short term trend is strongly bullish.
- LSMA RNP 21 shows a bullish indication in the price by showing in Green color.
Entry
We will enter the trade from as low as possible to get a lower risk and a higher reward. Therefore, we will enter on the first candle that closes above the SMA 5. Ensure that the candle is bullish and the candle’s size is bigger than the average candle.
Stop Loss
We will determine the invalidation level by observing the location of the price. The primary idea is to set the stop loss below the recent swing low.
Moreover, you can close the trade manually if the CCI 8 value comes to the zero lines. It is an indication of the current trend’s reversal that may lead the price down.
Take Profit
For a single take profit, you can close the trade if the price slows down from any important event level.
On the other hand, you can take partial closing from 1:1 R: R and let the profit run as high as possible. Later on, close the trade at 1:2 R: R or from any important resistance level.
Bearish CCI Strategy Trading System
The bearish trading method is suitable for all currency pairs, including the EURUSD, GBPUSD, USDJPY, or USDCAD.
However, major currency pairs have higher liquidity and lower volatility, so trading on major pairs is most profitable.
On the other hand, this strategy applies to any timeframes from 15 minutes or above.
Conditions For Short
- CCI 14 is below the -100 line, indicating that the long term bearish trend is strong.
- CCI 8 is above the -100 line, indicating that the short term trend is strongly bearish.
- LSMA RNP 21 shows a bearish indication in the price by showing in Red color.
Entry
We will enter on the first candle that closes below the SMA 5. Ensure that the candle is bearish, and the candle’s size is bigger than the average candle.
Stop Loss
The primary idea is to set the stop loss above the recent swing high.
Moreover, you can close the trade manually if the CCI 8 value moves to the zero lines. It is an indication of the current trend’s reversal that may lead the price up.
Take Profit
For a single take profit, you can close the trade if the price slows down from any important event level.
On the other hand, you can take partial closing from 1:1 R: R and close the trade at 1:2 R: R or from any important support level.
Summary
Let’s summarise The CCI Strategy Trading System For MT4
- The CCI Strategy Trading System For MT4 is based on the Commodity Channel Index indicator, a built-in trading tool in the MetaTrader 4 platform.
- CCI shows the market momentum based on the last 8 and 14 candle’s price action.
- The trading entry comes from the first candle above or below the SMA 5.
- The Stop Loss is based on the recent swing level, and take profit is based on S/R levels.
