The Commodity Channel Index (CCI) forex strategy for beginners is built on the Real_Woodie_CCI.ex4 custom indicator (a variant of the Commodity Channel Index indicator) and the BBands_Stop_v1.ex4 custom indicator.
This simple to understand strategy allows us spot cyclical turns in currency pairs and is excellent for beginners.
Chart Setup
MetaTrader4 Indicators: Real_Woodie_CCI.ex4 (default setting), BBands_stop_v1.ex4 (default setting)
Preferred Time Frame(s): 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours
Recommended Trading Sessions: Any
Currency Pairs: Majors and GBP/JPY
Download
Download the Commodity Channel Index (CCI) Forex Strategy with Real_Woodie_CCI
Buy Trade Example
Fig. 1.0
Strategy
Long Entry Rules
Initiate a long position if the following conditions or rules holds true:
- If the Chartreuse colored dotted line of the BBands_Stop_v1 custom indicator forms below price bars, it is an indication that price is being drive higher i.e. a buy signal.
- If the black line of the Real_Woodie_CCI.ex4 indicator breaks above the 0.00 level, it is a signal to enter a buy. If while the line is above the 0.00 level, lime colored squares forms on the 0.00 level, it further supports the bullish signal.
Stop Loss for Buy Entry: Place stop loss below support.
Exit Strategy/Take Profit for Buy Entry
Exit or take profit on position(s) if the following chart or indicator patterns are in display:
- If the BBands_Stop_v1 indicator forms an orange dotted line above price bar, it is a trigger to exit or take profit.
- If the black line of the Real_Woodie_CCI.ex4 custom indicator dips below the 0.00 level as shown on Fig. 1.0, it is a trigger to exit or take profit accordingly.
Sell Entry Rules
Enter a sell in the market if the following chart and/or indicator pattern are on display:
- If the orange colored dotted line of the BBands_Stop_v1 custom indicator forms above price bars, it is a trigger to go short i.e. a sell signal.
- If the black line of the Real_Woodie_CCI.ex4 indicator breaks below the 0.00 level, it is a signal to go short. If while the line is below the 0.00 level, red colored squares, lines the 0.00 level, it is an indication that the trend is very bearish.
Stop Loss for Sell Entry: Place stop loss above resistance.
Exit Strategy/Take Profit for Sell Entry:
Exit or take profit on position(s) if the following chart/indicator patterns are in display:
- If the BBands_Stop_v1 custom indicator forms Chartreuse colored dotted lines beneath price bars, it is an early warning to exit or take profit.
- If the black line of the Real_Woodie_CCI.ex4 indicator breaks above the 0.00 level, it a trigger to exit or take profit.
Fig. 1.1
Free Download
Download the Commodity Channel Index (CCI) Forex Strategy with Real_Woodie_CCI
About The Trading Indicators
The Real_Woodie_CCI.ex4 custom indicator is a variant of the Commodity Channel Index (CCI) and it incorporates a Least Squares Moving Average or LSMA (25).
This helps in the overall determination of trend by relating the current value to the previous value.
The BBands_Stop_v1.ex4 is a trend indicator and a variant of the Bollinger Bands.
The indicator finds its use in the gauging trend change, along with setting stop orders.