Complex trading system #8 (CCI Divergence Breakout)
Submitted by User on April 9, 2009 - 15:01.
This strategy is actually one of my favorite divergence strategies and takes little practice to expert it.
Warm Regards,
Navin Prithyani.
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Timeframe : 15mins and above
Indicator : CCI (Commodity Channel Index)
Strategy By : Navin Prithyani www.urbanforex.com
Description : This strategy uses hidden divergence and price action to take a breakout trade. Divergence is the one key indication in the market that can be useful and is not lagging. It is a sign of a market reversal coming up in the near future. Understanding and making use of divergence will help a technical trader greatly when analyzing the market.
Note : On my CCI, I always connect my peaks (tops) never the bottoms (dips). It is critical that you watch the video tutorial below with this strategy to understand it fully.
Long Breakout
- Price must be trending downwards
- CCI must go towards the upward direction and bounce
- After a bounce on the CCI, connect your high peaks on your price
- Aggressive : At a clear close above the trend line enter long
- Conservative : After the trend line is broken, wait for a pullback to the trend line to enter
Short Breakout
- Price must be trending upwards
- CCI must go towards the downward direction and bounce
- After a bounce on the CCI, connect your dips on your price
- Aggressive : At a clear close below the trend line enter short
- Conservative : After the trend line is broken, wait for a pullback to the trend line to enter
Stops
- If your trend line is not that steep, you can keep your stops at the high/low of the breakout candle.
- If your trend line is steep, keep your stop at the swing high/low
- If your trend line is medium steep, keep your stop at the low of couple candles away
Exits
- 1:1 Risk to reward. If your stop is -12 pips your limit should be +12 pips.
- Open 2 lots. If your stop is at -10 pips, once your trades goes in your favor and you're at +10 pips, close 1 lot and let the other one run. Exit at Support and Resistance levels.
- Exit at the nearest 50 or 00 level. These are psychological levels. (make sure your exit is at least the same number of pips as your stop, otherwise dont enter the trade)
- Trailing Stop. Once in a trade, at the close of each candle, place your stop 1 pip below the low (if in a buy trade). Vise versa for sell trade.
Short Example :
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Long Example :
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Video Tutorial : |
Can you share the Indicator in your Charts by Upload to 4shared ? Thanks in Advance
Hi Sir, thanks for the strategy. It sounds promising. Anyway, would you please let us know the setting of CCI ? Is it by default of 14 ? Thanks.
Maybe he used CCI(14) & CCI(50) with EMA 34 By Closed ... (Dr. Bob Setup)
Like this :
or with alternatif indicators : CCI(50) (RBBS Style) & Candlestcik CCI(14):
Regards;
Manus168
or we can combine RBBS CCI (50) & (14) like the screenshoot bellow (The Candle CCI 14 still used) :
So we can look more clearer entry & exit when the histogram in a same line color.
Regards;
Manus168
Navin i like the Connect the Divergence only in the top of the CCI only, this is great & Awesome, Thanks a lot Navin.
Kind Regards;
Manus168
Here's the Indicator :
DOWNLOAD LINK :
FX Sniper_s CCI.zip
Regards;
Manus168
Dear Manus168,
I'm glad you like the style.
Regards,
Navin
Here is another indicator as above but with a LSMA included default set at 25.
Real_Woody.ex4
Brad
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