Good day traders,
In this article I am going to show you and explain you how to use a double- CCI- Woodie indicator. As you understand this indicator has two CCIs. You know CCI, it’s a momentum indicator and I gave you many examples in previous articles. Let’s see how this indicator looks like.
This is the indicator. Double CCI- woodie. You can change the colors, the CCIs period and you can add alerts. In this chart we have one yellow CCI and another one CCI which is purple. We have also, a histogram if you notice. The histogram has green color in an up trend and red color in a down trend. The default settings for the CCIs are 14, 6 periods. How can we take signals from this indicator?
When the purple CCI goes above the zero-line we have a buy signal. On the other hand, when the purple CCI goes below the zero line we have a sell signal. If you want to filter the signals, you should look for the purple CCI to cross above the zero line when the histogram is green (buy signal). This means that we are in an uptrend and we trade with the trend. For a sell signal, you should look for the purple CCI to cross below the zero line when the histogram is red. This means that we are in a downtrend.
Look at this chart we have a buy signal. We are in an uptrend, notice the green histogram and the behavior of the price and after a retracement to the moving average the Double CCI cross above the zero line and the histogram is green. It’s a signal of the continuation of the trend.
Another thing you should know is that near the levels 200 and -200 it’s not good to open positions because many times in these spots we have the end of the trends.