CCI - Mr Chartman's Strategy

[singhy]

Hi all,

I came across Mr Chartman's post and his strategy here - https://www.trade2win.com/articles/784-day-trading-dow-jones

Something in it really resonated with me and have been backtesting/paper trading since reading it.

One thing I cant understand is how the strategy uses the CCI to find the right entry point. I understand and can read the RSI (I think!! to be honest every day is a school day) but I really am struggling to see how the CCI supports his strategy.

I have searched the forums for some guidance, but I couldn't quite see anything that was relevant (no doubt the first reply will have found something straight away )

I hope I can learn more from the members in this forum and i hope you can help me to understand how to read the CCI

Thanks

.S

 

[Rufus_Leakey]

Maybe try something like what's in this?.

A basic CCI strategy is used to track the CCI for movement above +100, which generates buy signals, and movements below -100, which generates sell or short trade signals.6 Investors may only want to take the buy signals, exit when the sell signals occur, and then re-invest when the buy signal occurs again.

The CCI can also be used on multiple timeframes. A long-term chart is used to establish the dominant trend, while a short-term chart establishing pullbacks and entry points into that trend. More active traders commonly use a multiple timeframe strategy, and one can even be used for day trading, as the "long term" and "short term" is relative to how long a trader wants their positions to last.

When the CCI moves above +100 on your longer-term chart, this indicates an upward trend, and you only watch for buy signals on the shorter-term chart. The trend is considered up until the longer-term CCI dips below -100.