Today we will speak about the latest trending tool Technical Analysis, Display Binary Options Commodity Channel Index (CCI).
Thanks to him, traders can determine the trend, and even change its pivot point.
Commodity Channel Index It was the creation of Donald R. Lambert. His appearance on the live chart represented as a conditional corridor rates.
Prices range from -100 to + 100. Thus more time 75% asset is within this channel.
Commodity Channel Index traders can offer two types of signals:
- If the curve indicator goes beyond the bullfights is included in the overbought zone (above + 100), it is necessary to wait for a turn indicator and the option open PUTBecause the price will tend to go back through the corridor.
- If the curve indicator goes beyond the bullfights is included in oversold territory (below -100), it is necessary to wait for a turn indicator and the option open CALLBecause the price will tend to go back through the corridor.
- When the curve crosses the line indicator -100 bottom line from the bottom up, you can open an option CALL.
- When the curve intersects the top line of the display + 100 from the top down, you can open an option PUT.
For beginners, I recommend the binary options use Binary Options Indicator CCI together with other trending tool.
Oscillators are popular not only among beginners, but also experienced pros. There is a wide variety of them, but the essence remains about the same. The basis of the Commodity Channel Index, like most other oscillatory indicators, is the theory of balance and price imbalance. When the price goes into overbought or oversold zones, it is considered that it has gone beyond its balance sheet. This means that soon there will be a correction in the direction of balance.
The Commodity Channel Index indicator can be customized for you, specifying the period and method of application. For beginners, I recommend leaving the factory settings.
In addition to the classic +/- 100 levels, some experienced pros also prefer to install additional ones depending on the level of volatility in the market: 0, + 200 / -200, + 250 / -250. You can add them in the indicator settings panel.
There is a main trading strategy developed by Donald Lambert himself. Its essence lies in the fact that when the line approaches the overbought level + 100 and crosses it from the bottom up, then we open a deal to increase. We close it when it intersects with the line again, but in the direction from top to bottom. That is, the price goes back to its balance. With trade for a fall, the situation is completely inverse.
The trade signals described above with exit from overbought and oversold zones are recommended to be confirmed with additional signals from the candlestick pattern analysis.