Getting to grips with CCI

G

GGecko

Hi,

I'm a relatively new trader and have spent the last few months getting to grips with the basics of TA and trying to get a feel for the US market. I've experimented with quite a few ideas and have settled on trading the US index ETFs: SPY, QQQ, DIA in a 3-minute timeframe. With my current level of experience this seems to fit my comfort zone.

Anyway, for a novice I've been reasonably successful at trading SPY using rudimentary TA, but I want to push myself to the next level and trade more frequently intra-day, using a couple of indicators to help determine trading opportunities. I've played around with the usual indicators: MACD, CCI, Stochastics etc. and have settled on getting to grips with CCI and stochastics as these seems to be the preferred indicators of intraday traders who trade the indexes and index futures.

So, my question relates to using CCI in particular and using it in tandem with stochastics. I've read through the CCI related threads on this and other sites so I'm familiar with the idea of CCI, trend divergences, trading from CCI extremes and 'batmans' but when I try to implement these I get as many false signals as I do real signals so I'm no better off. How do you gurus use CCI ? Are you using it in tandem with extreme moves in Stochastics ? Do you look for specific CCI moves across multiple timeframes or in relation to a turbo CCI ?

Basically, I've got all of the information in front of me (charts/volume/CCI/stochastics/TICK/TRIN etc.) but I'm struggling to figure out exactly how I should process this information. Continually improving skills and getting experience is obviously a key factor but I feel I need pointing in the right direction.

(By the way, I've already looked through the CCI threads at talkstox but found them to be a bit advanced for what I'm trying to get to grips with).

Any advice/information/thoughts appreciated.
 
I would rather grip something other than CCI

Personally I think it adds nothing to trading.

I have backtested some methods you described and do not believe they give what one would call an edge.

JonnyT
 
CCI

GGecko

If you take a look at the 'Eurostoxx' thread in TalkStox then you should find some good example charts of CCI setups. The eurostoxx50.co.uk board is also a good place to look for CCI info.

I find that a particularly good setup is to look for Turbo CCI slingshots in the direction of the current trend. Take a look at a 3 minute chart for the Dax (or Stoxx50) June future at 9.30 this morning for a nice example.

HTH

Gary
 
GGecko said:
... and have settled on getting to grips with CCI and stochastics as these seems to be the preferred indicators of intraday traders who trade the indexes and index futures.
Click to expand...

Indicators, as with everything, are cyclical - CCI seems to be the height of fashion at the moment.

If the majority of traders lose or break even, and if as you say the majority use CCI, then there is something to be said about not using it! Just a little something to ponder on ...

:cheesy:
 
Gary,

I've been running a 14 CCI under a 1min Ftse future. Must admit I don't know how to use it properly. How do I put a Turbo on it. I would like to check out your slingshot.
Incidentally, my 1min 3x3 P&F gave a buy at 63 at 09.46

Cheers
 
oatman

"Turbo CCI" is a 6 period CCI overlayed onto your standard 14 CCI. So you have 2 lines. If you need some examples of slingshots I can mail some chart screenshots to you, drop me a PM.

By the way I agree with most of what Skimbleshanks said regarding indicators. I've been through the Indicator learning curve, and come out of the other side. It's only CCI that I've found worth sticking with.

Gary
 
Thanks Gary, unfortunately I can't overlay. I've got the 6 underneath tho. I'll ring Tenfore and ask them why not. :cheesy:

Cheers
 
Thanks to everybody who has responded so far.

Basically, the problem I've been having is distinguishing exactly when I should/shouldn't be entering a trade. I can see price moving in a trend and in relation to pivot points and support/resistance and even the TICK/TRIN and that gives me an initial signal to enter/exit a trade.

What I'm trying to do is employ a couple of indicators to help give me an idea of the momentum and direction of the trend, the idea being to reduce the false signals, leaving me with more real signals than false. Stochastics and CCI seemed to be the main candidates.

If you don't use CCI do you use another indicator ? From my own experimenting, just relying on a chart with moving averages and volume seems very hit and miss.

Also, what kind of mental process do you go through, e.g. do you look at the chart and MAs as the principle indicator and something like stochastics or MACD for confirmation ? Or do you have another technique ?

I'm not looking for the holy grail (which I know doesn't exist in trading) or to blindly copy someone elses technique, just in finding my own style by trying out the approaches and ideas that other more experienced traders use. This is the drawback to being self taught - you can't bounce ideas off people or learn from others very easily as you would in a group. It's for this reason that I haven't gone down the road of employing Level II as I don't see how that can be taught from a book, it would have to be taught "hands-on" in my view.

All thoughts/comments/suggestions welcome.
 
Too many indicators will spoil your view. Try and keep it simple.
I still think MAs are one of the best and easiest to follow for a beginner. Don't try too much too soon. Momentum is very important. It's no good getting a signal when the market's dead. You could be sitting watching paint dry for a long time, which can cause you take a poor decision out of boredom. Experiment with MAs. I like 21 and 55 weighted crossover. Find what suits your time frame ,style, etc. There is no single indicator to follow.
Be flexible.
 
GGecko,

I have to go with Oatman on this one.

From your posts you seem to be using a Trend, Pivot Points, S/R levels, volume, TICK and TRIN. And now you want to add some more! Go back to basics. A simple MA crossover with a longer term MA filter works fine in most markets in the mornings. Add one more indicator to get clever but beyond that you will just confuse yourself.

Cheers

mmillar
 
GGecko

If you don't use CCI do you use another indicator ? From my own experimenting, just relying on a chart with moving averages and volume seems very hit and miss.
It's like everything in life. CCI is a good indicator some of the time. You just have to apply yourself to discovering exactly what it is telling you. This can't be done overnight ( like all indicators). Sure, you can use "text book" values and guidelines and they will work sort of, a lot of the time, especially on the big moves. Don't lit from one idea to another, or one suggestion to another..... Persevere with CCI, if you think it's worthwhile. Only after you have analysed it for a few months will you be truly in a position to say whether or not it works for you.
TA with MA's and volume is certainly NOT hit and miss. I have a number of posts on the DOW that make reference to ES futures and volume to confirm tops and bottoms. There is at least one very successfull trader on this BB that uses Volume and Price ONLY.
Only through application and dedication will you find out what works for you. Keep at it!
 
JonnyT said:
I would rather grip something other than CCI

Personally I think it adds nothing to trading.

I have backtested some methods you described and do not believe they give what one would call an edge.

JonnyT
Click to expand...


Personally, I prefer Indexia 11 Market Tracker 34/E9 on 60 minute charts trading over 1-2 days, too close to the coal face=burn
 
Thanks for all of the responses and the useful advice from everyone. I'm going to take step back and re-evaluate what I'm doing as I realise that I'm spinning wheels a bit.

By the way, thanks to whoever voted for me! :D
 
I voted for you, but have to admit it was a mistake.

I had noticed someone else had voted for me, but I was not perfect green anymore. Unfortunately I had no idea how this voting system works as I had never used it. In playing about I found with a click I had inadvertantly voted for you.

Sorry to shatter any illusion.

JonnyT
 
I've never found out how to vote for someone, or to find out how has voted for you, unless you have more than a few votes. What's the secret?
 
Peter

It looks like you go to 'Find Other Members', click on their name and the use the 'Rating' box.

I just voted for you to try it out - but then hey I always liked you anyway!

Gary
 
Hi mmillar,

If I cannot have that perfect shade of green, neither can you :cheesy:
 
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