CCI swing trading strategy is suitable for traders who prefer intraday trading. Work is being conducted on a trend, but deals are opening on pullbacks.
Characteristics of CCI swing trading strategy:
- Platform: MetaTrader 4 .
- Currency pairs: any, with a small spread.
- Timeframe: M5.
- Hours: European and American sessions.
- Broker: Forex4you , InstaForex , RoboForex , Fort Financial Services .
Trading strategy CCI swing. Rules of work.
1. Determining the direction of the trend.
CCI swing trading strategy is mainly used for intraday trading. First you need to determine the direction of the main trend on a 30-minute chart. To do this, use a simple moving average with a period of 200 (SMA200). We assume that the trend is upward if the price is above SMA200, and a downtrend if the price is below SMA200.
After the initial determination of the trend direction, we proceed to the next step. We open a 5-minute chart and see where the price is. The price should be on the same side of the moving average as on the 30-minute chart. If the location of the price does not coincide at these two time intervals, then this currency pair is not considered at the moment. We are looking for another.
In fact, on the 5-minute chart of the EURUSD pair, we see that the downtrend, originally determined on the 30-minute chart, is confirmed, because prices are below the SMA200. So, we move on to the next step of this trading strategy.
2. CCI indicator and entry points.
Once the trend is identified and confirmed, it's time to plan your entry into the market. To do this, add a CCI indicator with a period of 50 to the open 5-minute chart . The idea is that we will use the intersection of overbought and oversold zones as signals. In case of a downtrend, the signal to open a position will be the intersection of the +100 level indicator from top to bottom (exit from the overbought zone). On the contrary, with an uptrend, a buy signal appears when the CCI indicator crosses the level of -100 (exit from the oversold zone).
3. Stop loss and take profit.
The final step of the CCI swing trading strategy is to set a stop lossand take profit. To set stops, we again use the SMA200. We set stop loss on the SMA200 line. We measure the same distance as to the stop loss in the other direction. This will be the first take profit level. We close half of the volume of an open transaction when the price reaches this level. The second half of the volume is closed by the trailing stop. When the price reaches the first level, take profit stop loss is moved to the last maximum, but not higher than the line SMA200. This stop will move until the trend changes direction. In this case, the remaining position volume will be closed by the trailing stop. The longer the trend, the greater will be the profit when closing a position. It is more convenient to open two orders at once using this trading system. One closes at the first level of take profit, and the second - at the trailing stop .
In this example, we closed one position with a profit of 15 points, and the second position with a profit of 45 points. Naturally, you should not immediately start trading on this strategy. It is necessary to get rid of the history, try different currency pairs, maybe choose a different timeframe, maybe change other parameters of the trading system. Indeed, nothing is permanent in the Forex market. In one year, a trading strategy brings good profit, and in another it can be unprofitable. And finally, you should not work on this strategy during the release of important economic news, when there are sharp price movements.
Characteristics of CCI swing trading strategy:
- Platform: MetaTrader 4 .
- Currency pairs: any, with a small spread.
- Timeframe: M5.
- Hours: European and American sessions.
- Broker: Forex4you , InstaForex , RoboForex , Fort Financial Services .
Trading strategy CCI swing. Rules of work.
1. Determining the direction of the trend.
CCI swing trading strategy is mainly used for intraday trading. First you need to determine the direction of the main trend on a 30-minute chart. To do this, use a simple moving average with a period of 200 (SMA200). We assume that the trend is upward if the price is above SMA200, and a downtrend if the price is below SMA200.
In fact, on the 5-minute chart of the EURUSD pair, we see that the downtrend, originally determined on the 30-minute chart, is confirmed, because prices are below the SMA200. So, we move on to the next step of this trading strategy.
2. CCI indicator and entry points.
Once the trend is identified and confirmed, it's time to plan your entry into the market. To do this, add a CCI indicator with a period of 50 to the open 5-minute chart . The idea is that we will use the intersection of overbought and oversold zones as signals. In case of a downtrend, the signal to open a position will be the intersection of the +100 level indicator from top to bottom (exit from the overbought zone). On the contrary, with an uptrend, a buy signal appears when the CCI indicator crosses the level of -100 (exit from the oversold zone).
3. Stop loss and take profit.
The final step of the CCI swing trading strategy is to set a stop lossand take profit. To set stops, we again use the SMA200. We set stop loss on the SMA200 line. We measure the same distance as to the stop loss in the other direction. This will be the first take profit level. We close half of the volume of an open transaction when the price reaches this level. The second half of the volume is closed by the trailing stop. When the price reaches the first level, take profit stop loss is moved to the last maximum, but not higher than the line SMA200. This stop will move until the trend changes direction. In this case, the remaining position volume will be closed by the trailing stop. The longer the trend, the greater will be the profit when closing a position. It is more convenient to open two orders at once using this trading system. One closes at the first level of take profit, and the second - at the trailing stop .
In this example, we closed one position with a profit of 15 points, and the second position with a profit of 45 points. Naturally, you should not immediately start trading on this strategy. It is necessary to get rid of the history, try different currency pairs, maybe choose a different timeframe, maybe change other parameters of the trading system. Indeed, nothing is permanent in the Forex market. In one year, a trading strategy brings good profit, and in another it can be unprofitable. And finally, you should not work on this strategy during the release of important economic news, when there are sharp price movements.
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