CCI Moving Average Forex Trading Strategy

The logic for CCI Moving Average Forex Trading Strategy is very simple:

  • moving averages shows you the trend
  •  CCI is an oscillator that just shows you whether the market is oversold or overbought. The CCI cannot tell you if a trend is up or down.

So that’s the best thing about the CCI indicator: it warns you of about market being oversold or overbought.

Now, another suggestion to make this CCI Moving Average Forex Trading Strategy even better would be to use  reversal candlestick patterns for your entries like this:

  • once moving average cross over happens which is then confirmed by the CCI indicator and then wait for a reversal candlestick pattern and then take the trade.

Timeframes: 15mins and above

Currency Pair: Any

Forex Indicators required: 7 ema and 14 ema (or it can be in a combination of 9/19, 10/20, 25/50 ema etc) and CCI indicator with default settings.

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TRADING RULES

Selling rules:

  1. when 7 exponential moving average and 14 exponential moving average must cross over to the downside, which means there’s a great chance that it’s now a downtrend.
  2. Now, do not enter a sell order immediately at the crossover of the moving averages…but wait.
  3. Wait for price to rally back up to the moving averages, and then we look at the CCI to see if it is above the 100 or just crossed below it.
  4. If that’s the case, then we know we have a sell setup happening right there.
  5. Next thing you do is to Confirm these trading signals with bearish reversal candlestick patterns as shown on the chart below.
  6. Place a sell stop order 1-2 pips below the low of the bearish reversal candlestick pattern
  7. Then place you stop loss order 2-5 pips above the high of the bearish reversal candlestick.
  8. Set your take profit target levels to previous swing low levels.
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See chart below for example:

 

CCI Moving Average Forex Trading Strategy

Buying rules:

  1. when 7 exponential moving average and 14 exponential moving average must cross over to the upside, which means there’s a great chance that it’s now an uptrend.
  2. Now, do not enter a buy order immediately at the crossover of the moving averages…but wait.
  3. Wait for price to rally back up to the moving averages, and then  look at the CCI to see if it is above the 100 or just crossed above it.
  4. If that’s the case, then we know we have a buy setup right  happening there.
  5. Next thing you do is to confirm these trading signals with bullish reversal candlestick patterns as shown on the chart below.
  6. Place a buy stop order 1-2 pips above the high of the bullish reversal candlestick pattern
  7. Then place you stop loss order 2-5 pips below the low of the bullish reversal candlestick.
  8. Set your take profit target levels to previous swing high level.

See chart below for example:

CCI Moving Average Forex Strategy

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