Ways to make the CCI indicator system more informative
Terms and definitions
1. The distance between the last two closed candles on the indicator is called a run.
2. technical analysis works only with candles that have closed.
3. at small intervals, the signals received from the system SSI indicators are entry points, at larger time intervals they are reversal points.
Installation and preparation of the CCI indicator system for operation
In one area there are four identical indicators with different periods (5/8/13/21):
SSI indicator(5) - the main calculation indicator, which is a fast indicator in relation to the CCI(8) indicator. SSI(5) indicators work with SSI(8), SSI(13).
SSI indicator(8) is also the main calculation indicator and works as a slow indicator for CCI(5) or as a fast indicator for CCI(13). The CCI(8) indicator works with the CCI(13), CCI(21) indicators.
If the CCI(5) indicator has reached its extremum (± 150%, subject to tolerance of ± 10%), then the next run or two indicator does not work, the calculation of the next candle is done with the CCI(8) indicator.
If the CCI(8) indicator has reached its extremum (± 200%, taking into account the tolerance of ± 10%), the next run or two indicator does not work, the calculation of the next candle is done with the CCI(13) indicator.
The SSI system is built in the MetaTrader4 terminal.
Set the CCI(5) indicator:
1. Input parameters - period 5.
2. The color of the indicator is bright red. Width - zero (thinnest line). Style - zero (solid line).
3. Levels: -250, -200, -150, -100, -50, 0, 50, 100, 150, 200, 250.
4. The color of the levels is dark green, width - zero, style - second (dots).
5. Then use the menu items: View - Navigator - Indicators - CCI (see Fig. 1).
Fig. 1. Setting the CCI(5) indicator on the chart.
Set the CCI(8) indicator:
Next, you need to left-click on the CCI indicator in the Novigator window and, without releasing the button, export it to the area of the already existing CCI(5) indicator in the chart (see Fig. 2).
Fig. 2. Setting the CCI(8) indicator on the chart.
The following parameters must be entered in the new indicator (see Fig. 3):
1. Input parameters - period 8.
2. The color of the indicator is bright blue. Width - zero (thinnest line). Style - zero (solid line).
- Levels for the CCI(8) indicator do not need to be set (you can set all levels of the same color on the first constructed indicator).
Fig. 3. Parameters of the CCI(8) indicator.
Then, in the same way, the CCI(13) and CCI(21) indicators are set in the same area.
Set the CCI indicator(13):
- 250 % line yellow, dotted line;
-250% - yellow line, dotted line.
Set the CCI(21) indicator:
- 50 % line white, dotted line;
-50% - white line, dotted line.
For all CCI indicators.
Working with two indicators in the same area, you should keep in mind that the machine scales these two indicators differently, and you can get a variant when the CCI(5) indicator will be visually above the CCI(8) indicator on the chart, but the numerical values will be lower (it is advisable in these cases to use the locator - crosshair). Here you just need to optimize the scale, do the following operation.
In the window Custom Indicator - CCI, the icon "General", it is necessary to tick the boxes "Fix minimum" and "Maximum". After ticking the boxes, the windows next to the right are activated, where you must enter the numbers depending on the time interval at which the trader works (see Table No. 1).
Table No. 1
Tear property (there is a tolerance of ± 10 %):
1. If on the last closed candle the difference between the CCI (5) and CCI (8) indicators is greater than or equal to 100% and the indicators move in one direction, the "gap" property appears, giving a signal in the opposite direction to the movement of the indicator on the last run.
2. If on the last closed candle the difference between the CCI (5) and CCI (13) indicators is more or equal to 100% and the indicators move in one direction, the "gap" property appears, which gives signal in the opposite direction to the movement of the indicator on the last run.
3. If the last closed candle has these two properties at the same time, the weight of the signal increases to a strong, and the CCI indicator system gives a pivot point (see Example #1). At least three system signals are needed to make a decision.
4. If in the presence of the "gap" property CCI indicators(5) and CCI(8) are on opposite sides of the zero line, then the property works at a gap of 80% or more.
5. If the CCI (5) and CCI (13) indicators are on opposite sides of the zero line when there is a "gap", the property works when there is a gap from 80%.
Example: CCI indicator system on a 720 minute chart
Fig. 4. Graphical representation of an example of system operation on the 720-minute graph.
The symbols in Figure 4:
- The bold line under the candles is a CCI indicator(13);
- the thin line is the CCI(8) indicator;
- The dotted line with dots is the CCI(5) indicator.
Table 2 contains the values of the indicators and the average price, the last three candles.
Table No. 2
1. The situation after the closing of the candle at 12:00 pm on 03.02.2009 (European time). The gaps between the indicators are calculated. The gaps are calculated as the traversed path, without minus.
- The gap between the indicators CCI(5) and CCI(8) is 44.15% + (-40.58%) = 88.73%
- The gap between the indicators CCI(5) and CCI(13) is 44.15% + (-69.61%) = 113.76%
- The gap between the indicators CCI(8) and CCI(13) is (-69.61%) - (-40.58%) = 29.03%
The working ones are discontinuities:
- the gap between the indicators CCI(5) and CCI(8), which is 88.73% (less than 100%, but there is an amplification of this signal - the indicator CCI(5) is greater than zero, and the indicator CCI(8) is less than zero);
- The gap between the indicators CCI(5) and CCI(13), which is 113.76% (more than 100%).
There are two amplifications of the lower work signal on both gaps: the CCI(5) indicator is above zero, and CCI indicators(8) and CCI(13) are below zero. These four factors are sufficient to change the color of the next candle by CCI indicator system. But the system of indicators RSI gave the top work, and the day by calculation should have been white (the calculation of the day was made by the system MACD indicators), and the next candle turned out to be white.
2. The situation after the closing of the candle at 24.00 on 03.02.2009 (European time). The gaps between the indicators are calculated. The gaps are calculated as the traversed path, without minus.
- The gap between the indicators CCI(5) and CCI(8) is 155.64% - 47.22% = 108.42%
- The gap between the indicators CCI(5) and CCI(13) is 155.64% + (-20.86%) = 176.5%
- The gap between the indicators CCI(8) and CCI(13) is 47.22% + (-20.86%) = 68.08%.
The working ones are discontinuities:
- The gap between the CCI(5) and CCI(8) indicators, which is 108.42% (more than 100%).
- The gap between the indicators CCI(5) and CCI(13), which is 176.5% (more than 100%).
There are two reinforcements signal lower work on both gaps: the CCI(5) and CCI(8) indicators are above zero, and the CCI(13) indicator is below zero. These four factors are sufficient to change the color of the next candle in the system CCI indicators.