CCI Indicator

CCI Indicator explanation

A CCI indicator is another name for the commodity channel index. This is another oscillator and was originally introduced when Futures magazine (previously known as Commodities) ran an article about the CCI indicator by Donald Lambert in October 1980.
Having moved on from those times the CCI indicator has since increased in how popular it has become and it is now quite normal for a lot of dealers to use it to identify trending cycles in stocks, commodities & equities.
By changing the period over which averaging is done, the CCI indicator is changed to reflect the market’s time period.
What does the CCI Indicator measure?
The CCI indicator will assess how much a stock can vary from the statistical mean. It can be worked out by taking the difference between the simple moving average of a stock and its typical price. This figure is then divided by the typical price’s mean absolute deviation.
To allow most of the CCI indicator values to be somewhere between -100 and + 100 a constant of 0.015 has been set. It will then oscillate higher and lower than zero.
The amount of periods used will determine what proportion of CCI indicators that are in the range of -100 to +100.
There will be fewer values in the -100 to + 100 range and they will be more erratic in shorter CCI indicators.
Equally, if there is a greater time period used to work out the CCI indicator, there will be a higher proportion of values that are in the +100 to -100 range.
The CCI indicator is used by dealers and general investors to look for any reversals in price as well as how strong trends are and any extremes of price.
Like a lot of these instruments, the CCI indicator can be combined with more analysis tools. As an oscillator indicator of momentum, it fits into one of the categories that can affect a technical assessment along with volume indicators and price charts.

The CCI indicator is not dissimilar to Bollinger Bands in that it can be used for spotting any deviations away from a price trend, working as an indicator of oversold or overbought situations.
The more usual fluctuations of the CCI indicator will happen within the scope of the -100 to +100 and will usually vary above and below a line at zero.
Any value in excess of +100 would tend to show as overbought and under -100 would be oversold. In keeping with alternative indicators of this type, when an oversold or overbought situation occurs, it’s likely that price will adjust itself in time.

The CCI indicator is becoming very popular with investors. Often it will be used by dealers to decide trending cycles across equities, commodities and currencies.
Using the CCI indicators alongside alternative tools can be a very useful instrument in spotting possible price peaks and troughs which in turn can offer a good basis for predicting future movements in price.
As the majority of the CCI indicator will shows values between 70 to 80 percent as being in the +100 and −100 range a signal to buy or sell will only be relevant for 20 to 30 percent.
It follows that once the CCI indicators goes in excess of +100, a stock can be said to be moving into a trend that is strong and upward and a signal is made to buy.
But once this returns to underneath +100, this situation should be shut.  Equally once the CCI indicator is under -100, a stock is said to be moving into a trend that is strong but downward and the signal is given to sell.
The CCI indicator is very flexible and can help in spotting price reverses.
The bottom line
The CCI indicator has enjoyed considerable increase in just how popular it is with technical investors as it can be used to spot trends in currencies, equities as well as its original focus – commodities.
By using it with more oscillators, it can help to pick out the highs and lows of a price which can help forecast any future price changes.

Bollinger Bands Explanation Video

Learn more: Bollinger Bands

BOLLINGER BANDS Forex Indicator

BOLLINGER BANDS

The method of taking a moving average with a couple of trading bands above and below it was created by John Bollinger (an experienced market technician ) in the 1980s.
Unlike a percentage forecast from a regular moving average, Bollinger bands simply add and deduct a standard deviation calculation.
Standard deviation is a precise formula that indicates volatility, showing how the stock price can fluctuate from its correct value.
By measuring price instability, Bollinger bands alter themselves to market situations.
This is exactly what makes them so handy for traders: they are able to uncover pretty much all of the price data needed between the two bands.

So what is a Bollinger Band?

Bollinger bands comprise of a centre line and two price channels (bands) above and below it.
The centre is an exponential moving average; the price channels are the normal distortions of the stock being analysed.
The bands would increase and tighten as the price action of an issue becomes unstable (expansion) or becomes bound into a tight trading model (contraction).
A stock could transact for long periods in a trend, but with some instability every now and then.
To more easily identify the pattern, traders use the moving average to organize the price activity.
By doing this, traders can collect important information about how precisely the market is buying and selling.
For example, after a severe increase or decline in the trend, the market may solidify, trading in a narrow fashion and going above and below the moving average.
To more easily monitor this action, traders use the price channels, which include the trading activity across the trend.
We realise that markets trade erratically on every day even though they will be still transacting upwards or downwards.
Service professionals employ moving averages with support and resistance lines to anticipate the price action of a stock.
Upper resistance and lower support lines are initially created and then planned to form channels within which the trader anticipates prices to be included.
A few traders make straight lines linking higher or lower sides of prices to recognize the uppermost or lower price extreme limits and then add parallel lines to specify the channel within which the prices ought to move.
Provided that prices do not move out of this channel, the trader can be fairly positive that prices are going as predicted.
When stock prices regularly meet the uppermost Bollinger band, the prices are thought to be overbought;
 in contrast, when they continually hit the lower band, prices tend to be considered to be oversold, causing a buy signal.
When employing Bollinger bands, assign the upper and lower bands as price goals.
Suppose the price moves off the lower band and crosses above the 20-day average (the middle line), the uppermost band seems to stand for the upper price target.
In a strong uptrend, prices usually fluctuate between the top band and the 20-day moving average.
When that occurs, a cross-point under the 20-day moving average signals that there may be trend heading downwards.
This doesn’t mean that Bollinger bands are not a well-regarded gauge of overbought or oversold items, but we should start off by first recognising trends and then straightforward moving averages before we move on to more exciting indicators.

The Bottom Line

While each and every strategy has its downsides, Bollinger bands have become one of the most useful and frequently used instruments in spotting excessive short-term prices in a security.
Buying when stock prices cross beneath the lesser Bollinger band frequently allows traders to take advantage of oversold situations and gain when the stock price goes back up in the direction of the centre moving-average line.

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Wolfe Wave Indicator

Wolfe Wave Explanation

The Wolfe Wave is a natural pattern found in the forex market. Its basic shape shows a fight for balance, or equilibrium, between supply and demand. This naturally occurring pattern was not invented, but rather discovered as a means to predicting levels of supply and demand.

These patterns are very versatile in terms of time, but they are specific in terms of scope. For instance, Wolfe Waves occur in a wide range of time frames, over minutes or even as long as weeks or months, depending on the channel. On the other hand, the scope can be predicted with amazing accuracy. For this reason, when correctly exploited, Wolfe Waves can be extremely effective.

To identify Wolfe waves, they must have the following characteristics:

Waves 3-4 must stay within the channel created by 1-2
Wave 1-2 equals waves 3-4 (shows symmetry)
Wave 4 is within the channel created by waves 1-2
There is regular time between all waves
Wave 5 exceeds trend line created by waves 1 and 3 and is the entry point

The estimated price is a price along the trend line created by waves 1 and 4

Wolfe Wave Indicators Comparison

We have analyze several Wolfe Wave Metatrader 4 indicators. All Wolfe Wave Metatrader 4 indicators based on ZigZag. BJF Trading Group Wolfe Wave Metatrader 4 Indicator can recognize all Wolfe wave paterns on specified time range. It checks every top for potential 1,2,3,4,5 points not only ZigZag tops.

New AO Forex Divergence Indicator

Awesome Oscillator Forex Divergence Indicator

Bill Williams’ Awesome Oscillator (AO) is designed to show current market momentum and is displayed as a histogram. The Awesome Oscillator is created using the difference between the 34-period and 5-period simple moving averages of the bar’s midpoints (H+L)/2.

Each bar of the histogram that is higher than the preceding bar is green. Each bar that is lower than the preceding bar is red.

This indicator is intended to show what’s happening to the market for the current period (compared to the momentum of a longer period), and some traders use its signals for buying and selling decisions.

Forex Divergence Awesome Oscillator shows divergence areas on indicator and arrows on chart.

Learn more about Forex Divergence Indicators

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