CCI Histogram Forex System
The CCI Histogram Forex system is a trend following system that takes advantange of the CCI histogram indicator and MegaTrend.
This system works best on low spread major currency pairs and some cross pairs (EUR/GBP, EUR/JPY and GBP/JPY).
Your general success rate when deploying this system will most likely depend on the time frame you trade on, for scalping and day trading, I recommend to use it on the M5, M15 and M30 charts.
Let’s get started:
MetaTrader4 Indicators: cci-histogram.ex4 (Inputs Variable Modified; A_period=55.0, B_Period=24, neutral=5), mega-trend-indicator.ex4 (Default Setting), trend-continuation-factor.ex4 (Inputs Variable Modified; T3_Period=36)
Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week
Recommended Trading Sessions: Any
Currency Pairs: Any pair
Buy Trade Example
Long Entry Rules
Enter a bullish trade if the following indicator or chart pattern gets put on display:
- If the maroon line and histograms (dark gray & royal blue) of the cci-histogram Metatrader 4 indicator breaksabove the 0.00 level as seen on Fig. 1.0, price is said to be pressured higher i.e. a trigger to go long on the designated forex pair.
- If the blue line of the mega-trend-indicator aligns fairly below the candlesticks as shown on Fig. 1.0, the general market sentiment is said to be bullish, as such a buy alert is imminent.
- If the green line of the trend-continuation-factor custom indicator crosses the orange line to hover above it as illustrated on Fig 1.0, price is said to be pushed to the upside, therefore a buy order will suffice.
Stop Loss for Buy Entry: Place stop loss below medium-term support.
Exit Strategy/Take Profit for Buy Entry
Exit or take profit from all trades if the following rules or conditions takes precedence:
- If the maroon line of the cci-histogram custom indicator breaksbelow the 0.00 reference level while a bullish trend is running, bullish exhaustion is said to be setting in, therefore an exit or take profit is advised.
- If the line of the mega-trend-indicator reverts to red during the course of a bullish signal, it is a trigger to exit or take profit forthwith.
- If the green line of the trend-continuation-factor indicator crosses its orange line to go below it as depicted on Fig. 1.0, more bulls are said to closing their positions, thus a trigger to exit or take profit at once.
Sell Entry Rules
Go short if the following setups gets displayed rightly on the activity chart:
- If the maroon line and histograms (dark gray & red) of the cci-histogram indicator dips below the 0.00 level as exemplified on Fig. 1.1, price is said to be dragged lower i.e. a trigger to go short on the selected currency pair.
- If the red line of the mega-trend-indicator aligns somewhat above the candlesticks as illustrated on Fig. 1.1, the overall market sentiment is said to be bearish, as such a sell alert is in the offing.
- If the orange line of the trend-continuation-factor custom indicator crosses the green line to stay above it as depicted on Fig. 1.1, price is said to be pushed to the downside, therefore a sell order will do.
Stop Loss for Sell Entry: Place stop loss above medium-term resistance.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit if the following takes center stage:
- If the maroon line of the cci-histogram custom indicator surgesabove the 0.00 horizontal reference level while a bearish trend is ongoing (refer to Fig. 1.1), bearish exhaustion is said to be setting in, therefore an exit or take profit is recommended.
- If the line of the mega-trend-indicator reverts to blue during the course of a bearish alert, it is a trigger to exit or take profit without delay.
- If the orange line of the trend-continuation-factor indicator crosses its green line to stay below it as demonstrated on Fig. 1.1, more bears are said to leaving the market, thus a trigger to exit or take profit immediately.
Sell Trade Example
About The Trading Indicators
The cci-histogram indicator is a momentum indicator that is based on a number of patterns made by the Commodity Channel Index (CCI) indicator.
The mega-trend-indicator is an enhanced Hull Moving Average indicator set to a default period of 144.
It does attempt to eliminate lag altogether, while also enhancing smoothing.
The trend-continuation-factor is a trend-following indicator that forms a band within an indicator window.
The lines of the band overlap as a signal to buy/sell the forex pair of interest.