Woodies CCI Indicator: An Indicator You Can Use To Identify Trading Positions
Essentially, Woodies Commodity Channel Index (CCI) is a slightly modified version of the classic Commodity Channel Index (CCI). In addition to the pivot point system, Ken Wood proposed this one.
CCI Indicator: What Is It?
Donald Lambert developed the CCI oscillator in order to watch the commodity market back in the 1980s. Currently, it is used to trade all assets, including currencies, commodities, stocks, and exchange-traded funds.
Woodies CCI: Key Parts
An alternative to the CCI is the Woodies CCI. The Woodies CCI includes several key elements, including:
- CCI turbo – The line is used to detect trends and determine where to enter the market. According to Ken Wood, the setting for this turbo should be set at 14.
- Trend CCI – This is an indicator of CCI. Ideally, it should be 14 days long.
- Zero line – The black line depicts the main support and resistance levels.
Fair enough, both the CCI indicator and the Woodies CCI require a substantial amount of time. The trader should, however, focus on how to apply and use the indicator as we have already discussed.
A large number of the best day traders aren’t familiar with how Woodies CCI (and many other indicators) work.
Woodies CCI Indicator: How To Use It
As with most oscillators, Woodies CCI can be used to identify overbought or oversold positions in a trade. In general, oversold prices are signals to buy; on the other hand, overbought prices are signals to sell.
Don’t Miss Out On The Assets
Woodies CCI would be used to determine if the asset was in a narrow range or if it was trending. In a ranging market, it tends to be nearly impossible to use oscillators.
If Trends Are Occurring, Focus On The Centerline.
As for the centreline, you should keep your eye on it if the price is trending. The CCI line moves above the neutral line when the histograms move above the line. In the same way, a sell signal is detected when either the CCI or the histogram is below the neutral line.
Use In Conjunction With Other Indicators
You can also combine the Woodies CCI with other indicators when using it. In particular, trend indicators, such as moving averages, average directional indexes, and Bollinger bands, combine well with it.
Conclusions
Technical indicators aren’t widely used in the market, and the Woodies CCI isn’t one of them. However, most trading platforms, such as MetaTrader, do not automatically provide it. It must be downloaded from the marketplace before it can be used.
The signals for buys and sells are also typically hard to perceive, which means that you must take your time creating strategies and testing them.
