Learn the secrets and techniques behind the CCI (Commodity Channel Index) indicator strategy, a popular tool for intraday trading and swing trades. Can the CCI strategy be profitable? In this tutorial, we’ll explore real technical analysis examples and explain how to trade CCI indicator strategies effectively.

What Makes the CCI Indicator Unique?
The CCI indicator is versatile. Some traders use it to identify overbought and oversold zones, while others use it to determine the direction of new trends. Which method is correct? How can we use the CCI indicator properly without risking our accounts? Let’s find out.

The CCI is one of the best indicators available, capable of increasing the win rate of your strategy if used correctly. However, there are two different trading strategies based on this one indicator. When Donald Lambert created the CCI indicator in 1980, he used it to identify strong trends in the commodity market—hence the name, Commodity Channel Index. Since then, traders have adapted the CCI indicator for use in all types of markets and time frames.

There are two primary ways traders use the CCI indicator:

To find strong trends.
To identify reversals.
In this video, we will explore both methods. As always, I will also test the CCI indicator 100 times to determine its real win rate and ensure it works. But I’ll do that in a separate video, so subscribe to see it. I’ve already tested MACD, RSI, and other indicators 100 times to find their real win rates. Check out those videos if you’re interested. After all, you don’t want to risk your money on a strategy that doesn’t work.

How the CCI Indicator Looks and Functions
At first glance, the CCI indicator resembles the RSI indicator but functions differently. On TradingView, the CCI indicator consists of an orange line called the CCI line and two horizontal lines known as the upper band and the lower band.

Two Trading Strategies Based on the CCI Indicator
The Trend-Following Method (Donald Lambert’s Approach)

Buy Signal: When the CCI line crosses above the positive 100 line (upper band), it can indicate the start of a strong uptrend.
Sell Signal: When the CCI line crosses below the negative 100 line (lower band), it can indicate the start of a strong downtrend.
Here’s an example: When the CCI crosses above the upper band, the market often gains momentum, leading to a strong uptrend. Conversely, when the CCI crosses below the lower band, a strong downtrend may start.

Important Note: While you can enter trades as soon as the CCI crosses above or below the bands, using the CCI indicator alone may result in false signals. It’s best to pair it with other indicators.

This method works best in trending markets. To determine the long-term trend direction, use the 200-period moving average. If the price is above the moving average, focus on buying; if the price is below, focus on selling. This approach helps avoid false signals.

Modified CCI Trend Trading Strategy:

Buy: When the CCI crosses above the upper band, and the price is above the 200 EMA.
Sell: When the CCI crosses below the lower band, and the price is below the 200 EMA.
If you want to learn about the best MACD trading strategy that I back-tested 100 times to determine its profitability, check out the first video on this channel. You can also explore other strategies that I’ve tested 100 times.

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