CCI Divergence + Trend Line - indicator forex strategy (49 points profit)
In indicator forex strategy "CCI Divergence + Trend Line" we will use the divergence indicator Commodity Channel Index (CCI), which gives a signal of a reversal or temporary rollback prices. Currency pair - any, time interval - 15 minutes and above.
Better to trade through a broker with MetaTrader 4 - Forex4you .
First you need to install on the graph indicator FX Sniper's CCI (download) . You can also use a ready template (CCI divergence) .
Now you need to decide on the term "divergence Commodity Channel Index (CCI)" for the indicator forex strategy "CCI Divergence + Trend Line". Thus, the divergence (born divergence) - divergence in the chart of the currency pair with the direction indicator CCI. For example, the price draws coming one after the other highs and the CCI indicator draws similar lows - this divergence. Or price drew several minima, and the graph CCI oscillator seen successive highs - it is also called the divergence.
According to forex strategy based on the indicators "CCI Divergence + Trend Line" is a long transaction (purchase) if:
1. The downward trend (price draws lows, following one after the other).
2. CCI divergence observed in the same timeframe.
3. Second extremum closing CCI shows 1-2 bars or more after the divergence formed.
4. Trendline is based on the high extreme price movements in the interval when there is divergence. Price moves down.
5. Price has closed above the trend line, which is directed downward.
6. Enters the market (buying) at Open of the next candle after the trend line has been broken.
7. Stop Loss set below the local minimum or below the Low candle that broke the trend line (the size of the candle should be at least 50-70 points).
8. Take Profit is not set. Once the price went in our direction a distance equal to the value of Stop Loss, tightens it to 0 and close half of the position volume.
9. Remainder of the transaction (50%), it will support the trailing stop, the amount of which will vary depending on the currency pair and time interval. Approximate value of the trailing stop size = Stop Loss.
Important: in case of new or divergence prorisovyvaniya later extremum on CCI indicator after you have built a trend line - better again draw a trend line and go back to step 3 or delete drawn line and wait for new signals.
With a deal to buy - conditions are mirror.
Example. EURUSD, M15.
Witnessing a downward trend. According to the maximum extrema draw a downward trend line price. In the graph on the CCI oscillator minimum postpone uptrend. There is a divergence of the price and the indicator. We are looking for an entry point into the market to buy.
Spark at 23.45 08.06.2011 closes above the trend line. Opened at the next candle Open = Close current candle = 1.4582. Set the Stop Loss at 1.4562 (local minimum).
09.06.2011 At 03.00 the price goes the distance equal to the size of Stop Loss - cover half the position (level 1.4602), tightens Stop Loss to 0 (breakeven). The remaining 50% of the position set trailing stop 15-20 points.
At 08.45 on the same day on a pullback, our position is closed at the trailing foot. Our profit was 29 points. Gross Profit is 20 +29 = 49 points.
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