CCI Forex Trading Strategy For Metatrader 5
One of the hardest steps for traders is formulating a profitable trading strategy that is tailored to their needs.
While forex strategies can range from the complex to the very basic, formulating a trading plan for the currency market does not necessarily have to be complicated.
The CCI Forex Trading strategy for Metatrader 5 is a multi-functional trading system that finds use in all market conditions.
The rules to buy and sell are simple to understand and execute on any trading instrument of your choice.
It can be applied to all forex pairs and even stocks and other trading instruments.
To spot the exact direction of the market, the strategy deploys a set of indicators for this purpose.
MetaTrader 5 Indicators: Alligator.ex5 (Default Setting), CCI variation.ex5 (Parameters Modified; Period=60)
Trade Style: Scalping, day trading, swing trading
Trading Sessions: London | New York | Tokyo
Currency Pairs: Majors, cross pairs, exotics (also fits stocks, commodities, cryptocurrency,..)
Platform: Metatrader 5 (MT5)
Buy Trade Example: EURCAD, M30 Chart
Trading Strategy Rules For Buy and Sell Trades Explained
Enter a buy trade if the following trading conditions are met:
- If the CCI variation custom indicator line is filled medium sea green as illustrated on Fig. 1.0, price is said to be driven to the upside i.e. a trigger to go long on the selected forex pair.
- If the blue line of the Alligator Metatrader 5 forex indicator crosses below the lime and red lines as depicted on Fig. 1.0, the general market sentiment is said to be bullish, therefore a buy alert will suffice.
Suggested Stop Loss for Buy Entry: Place stop loss below immediate support.
Suggested Exit Strategy/Take Profit for Buy Trade
Exit the buy trade if the following trading conditions are met:
- If the line color of the CCI variation custom indicator reverts to orange red while a bullish trend is ongoing (see Fig. 1.0), it is signaling diminishing bulls power, therefore an exit or take profit will do.
- If the lime line of the Alligator forex indicator crosses below the red line while a bullish trend is ongoing, a bearish reversal is said to be imminent, as such an exit or take profit stance is duly recommended.
Open a sell trade if the following trading conditions are met:
- If the CCI variation custom indicator line is painted orange red as shown on Fig. 1.1, price is said to be dragged lower i.e. a trigger to go short on the designated currency pair.
- If the blue line of the Alligator custom indicator crosses above the lime and red lines as illustrated on Fig. 1.1, the overall market sentiment is said to be bearish, thus a trigger to sell the currency pair of focus.
Suggested Stop Loss for Sell Entry: Place stop loss above immediate resistance.
Suggested Exit Strategy/Take Profit for Sell Entry
Exit the sell trade if the following trading conditions are met:
- If the line color of the CCI variation custom indicator reverts to medium sea green during a bearish signal (refer to Fig. 1.1), it is pointing to weaning bears power, therefore an exit or take profit is recommended.
- If the lime line of the Alligator forex indicator crosses above the red line during a bearish signal, a bullish reversal is said to be in the cards, as such an exit or take profit stance is advised.
Sell Trade Example: EURCAD, M30 Chart
MT5 Trading Indicators Used For This Strategy
The Alligator is an indicator by Bill Williams, introduced in 1995, the indicator is comprised of three lines that are overlaid on the activity chart.
The lines represent the jaw, the teeth and the lips of the Alligator.
Traders tend to use this indicator to gauge trend and its possible direction.
The commodity channel index oscillator that was originally introduced by Donald Lambert in 1980.
The CCI variation Metatrader 5 forex indicator is an enhanced CCI indicator.
This CCI variant makes use of a colored line that changes to medium sea green and orange red when the trend changes to bullish and bearish respectively.