alf44
2,025 posts
msg #44645
- Ignore alf44
modified |
6/6/2006 12:07:08 AM
Well ALRIGHTY then...
Firstly, I don't have a "scan" that incorporates the combination of CCI(10) and CCI(30)...and I don't think I ever said I did ! I just said that this was a part of my current chart set-up !
Secondly, I make no claims that THIS set-up is the right choice for everyone...and in fact...I'm sure it is NOT ! I also have NO interest in persuading ANYONE...of ANYTHING ! These are just my thoughts and nothing more !
Thirdly, I saw RAGGS now deleted "bash post" and would like to give a shout out to SF for giving it the attention it deserved !
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So...without further ado...I will attempt to describe how I use these 2 indicators [CCI(10) & CCI(30)] in both my chart analysis and my trade decisions.
I mentioned in my last post here to Bfreshour..."CONTINUITY" !
What I meant by that is that I like the idea of having my CCIs and my EMAs to be of the same period. It is NO accident that I use an EMA(10) and a CCI(10) ...and a EMA(30) and a CCI(30) !
CONTINUITY !!!
Having Price x-over an EMA (ie...a moving average of price) is one thing ! However, having Price x-over an EMA...with a simultaneous ZERO x-over of a CCI is quite a different event...and MUCH MORE meaningful ! When the CCI(30) crosses ABOVE or BELOW the ZERO LINE simultaneous (ie. within a day or so) to the cross of Price and an EMA(30)...this very often leads to explosive moves in the direction of the x-over. It's important that the CCI(10) is ALREADY ABOVE or BELOW the ZERO LINE...when the CCI(30) cross takes place and confirms the earlier CCI(10) cross !
Again, think about what exactly a CCI is telling you. I have mentioned that I look at CCI as a proxy for Bollinger Bands. I say that because CCI is ultimately a measure of volatility. In fact, it is a measure of a security's OWN inherent volatility. It measures how much today's "typical price" [ie. (H+L+C/3) ...btw, that's a Daily Pivot calculation for those of you who may have noticed) deviates from the average of "typical prices"...over a given lookback period of time. Think of the ZERO LINE of a CCI as the "average typical price" for the lookback period that is being used. When CCI crosses ABOVE or BELOW the Zero Line, it is indicating that Price has now moved ABOVE or BELOW the "average typical price" for the particular lookback period of time being observed.
Looked at another way...the ZERO LINE of a CCI(10)...approximates/mimics an EMA(10)...
...and the ZERO LINE of a CCI(30)...approximates/mimics an EMA(30) !!!
When Price crosses (or pulls back to) it's EMA(10)...you will ALSO see the CCI(10) cross (or pull back to) it's ZERO LINE !
When Price crosses (or pulls back to) it's EMA(30)...you will ALSO see the CCI(30) cross (or pull back to) it's ZERO LINE !
These CROSSOVERS of...and PULL BACKS to...the CCI ZERO LINE are very powerful trade set-ups !!!
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I could go on forever...and I've hardly scratched the surface of ALL the CCI techniques that can be used.
Trendlines !
Patterns !
Divergence (of course) !
And on and on...
That will have to do for now !!!
Regards,
alf44
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