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Exit strategy #6 (Tight stop timing with CCI)

Today's challenge: how to exit a trade in time without leaving much on the table.

Today's system: reveals how to use CCI indicator to know where to pull the trigger and launch aggressive price chasing.

The idea is actually pretty simple, like all good ideas: we need to figure out when price gets "carried away" in a rapidly developing momentum and from that point we'll be looking to aggressively protect our gains while giving the market a chance to progress till it runs out of steam and inevitably reverses.

To illustrate the strategy I've chosen 15 min EURUSD and 30 CCI.
For other pairs and other time frames, you can figure out the settings quite easily with a few minutes observation; there is no golden rule, just your perception of the market. I encourage you to experiment! If you find a good combination, share it with other trader here.

Back to the point now:

On the screen shot below let's first take a look at Parabolic SAR (0.1, 0.1). In this example it represents a regular trailing stop trading: a trader simply places a trailing stop behind each new SAR dot, until finally the stop is hit.

(Click for a larger image)
Exit with CCI indicator Forex

Now we move to CCI.
We are interested in CCI when it goes above 100 (overbought) and below -100 (oversold). Before that we happily trail our stop with whatever indicator we have, in our example it is a Parabolic SAR.

So, after opening a trading position we are trailing our stop with SAR indicator, but then later there is a signal from CCI -> CCI hits 100/-100 mark. We react to it by abandoning our old trailing stop method/indicator and instead introducing a candle by candle trailing as illustrated on the screen shot above. Circled in purple are the moments when we switch from trailing stops by SAR to trailing stops by candlesticks (e.g. behind each newly closed candlestick). We do so candle by candle till we get stopped out.
That's it. We get stopped. There will be a new trade, another stop trailing until CCI signals that its time to limit risks and protect profits if any.

This exit strategy prevents emotional trading, stop guessing and other fears related to protecting profits while letting a trade run. It shows how to control the situation when market accelerates and/or prepares to reverse.

Happy trading!

Truly yours,
Edward Revy

Great Idea! CCI is great at showing overbought/oversold areas, and this method allows the best time to begin a bar by bar stop loss.

Best wishes,

The Cat Preacher

can you post some of indicator of this system... there are great system..

Indicators are simple standard tools found on every trading platform:
CCI (30)
Parabolic SAR (0.1, 0.1)

Everything else is drawn by me to illustrate entries, trailing stops etc.


I am not sure how you put trailing stops based on the sar indicators. Also does this work for all timings and currencies.


Hi Diaa,

the method should work for all currencies and time frames.

Here is an explanation of Parabolic SAR based stops we begin with.

Best regards,

Hi all,
I think that this can be changed a little bit. My idea is : when the CCI crosses (-100) while on an UP TREND, we should enter the market by buying. Same way, when it crosses (100) while on a DOWN TRENT, we should enter the market by selling. Try it and see!


Great day,

Thanks Ed for the setup, i used it for 2 ays and neted 10%+

will keep using it.


hi all
my opinion adx better than cci because adx gives the signal very early than cci