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:

Chart Setup

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

Download

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Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Enter a bullish trade if the following indicator or chart pattern gets put on display:

  1. 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.
  2. 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.
  3. 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:

  1. 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.
  2. 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.
  3. 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:

  1. 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.
  2. 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.
  3. 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:

  1. 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.
  2. 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.
  3. 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

Fig. 1.1

Free Download

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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.

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