Forex Trading Strategy: CCI Breakout Strategy – Ideal For Part Time Traders!

You must have used the Commodities Channel Index (CCI) as a trader. CCI is an oscillator that is often used by the traders to measure the strength of the market cycle and to predict when the current market cycle will end. This CCI Oscillator oscillates between two extreme values of +100 and -100. A value above +100 means the market is overbought and a value below -100 means that market is oversold!

When the value of CCI rises above -100, traders take it as a signal to buy. Similarly when the CCI oscillator value falls below +100, traders take it as a sell signal. Now, we will be using this information in conjunction with the usual support and resistance levels on daily chart in our Commodities Channel Index CCI Breakout Strategy!

Let’s suppose CCI Breakout takes place with its value rising above -100 or falling below +100. When this happens, the market usually tends to make a retracement before continuing with the breakout. We will be using this fact in our CCI Breakout strategy by placing an Entry Order at the Open Price of the Daily Candle that caused the breakout.

What this means is that the price action will make a retracement and in most cases your entry order will get filled on the following day. But in some cases, the momentum is strong enough for the price action to move forward for several days without making any pullback.

If this happens and your entry order doesn’t get filled for the next let’s say five trading days or the CCI oscillator again falls back to the overbought or the oversold condition, simply remove the entry order and wait for another trade. When using the CCI Breakout Strategy, you will get ample of hours before the entry order is filled by the market. You can utilize this time to think and plan your trade well using Fibonacci Ratios.

You can use this CCI Breakout to identify trend, counter trend as well as range trades. You will identify the take profit target with Fibonacci Retracement Levels in case of Counter Trend or Range Trades and with Fibonacci Extension Levels in case of Trend Trades. Place the stop below or above the immediate low or high set prior to the CCI Breakout. Only enter the trade if the risk to reward ratio is less than 1:3 otherwise skip.

You can fist practice this CCI Breakout Strategy on your demo account. This strategy is ideal for part time traders who do regular jobs and trade in the evenings or in their spare time. Good Luck!

Mr. Ahmad Hassam has done Masters from Harvard University. Get these 3 Swing Trading Systems FREE. Master these highly profitable Candlestick Patterns with this FREE 82 page PDF Candlestick Guide.

Indicator-Based Forex Trading Strategies.

No matter what Forex strategy you make use of, there must have been times when you perform Forex trades and then felt that you had never played it. The statement laid here will help you so you can make use of it on all of your trades that might in fact cause your anxiety. Always remember that a Forex indicator can always help in incrementing a degree of certainty to that strategy that you make use of for your Forex trading.

But with any indicator it surely is considered as salty if you try and perform trades on this factor alone. You can always ensure that if you make use of it with all your alertness that are set on the higher points, then it can always help you to check that all of your transactions are just going in the right direction and that the trades are on high prospects. The actual setting with these forex indicators on charting packages sets two separate exponential moving averages at 12 and 26 days.

This is one point that is marked by a color line (but you have to ensure that the color might just differ based on the variation of charting package you utilize), which crosses a distinguished colored (9 EMA) which is also called as the triggering line. So the instance the 26/12 EMA crosses the 9 EMA triggering line it states an upward momentum and also vice versa.

There are many Forex indicators that have a mid line or even termed as a zero line that is often called as a line of water. So, when you are trading with any indicator just above this center line then the indicators shows an upward trend. And in case this is in fact below the level then a lower trend is indicated by the indicator. This is the basic strategy that is used by many indicators when you are trading in Forex trades.

A number of indicators also provide you with a histogram that is in the pattern of vertical lines that might just appear below or above the center line. You have to keep in mind that there are few Forex indicators that are a type of lagging indicator which are designed to follow the market price action. On seeing the histogram can certainly give you a clear picture of the direction in which you Forex trading is heading at an early stage.

The author is using many strategies and indicators together to enhance the resulting effect. Possibilities of using the MetaTrader indicators to develop free Forex strategies are quite limitless.