Woodies CCI trading system
- Thread starter kkeskar92
- Start date
i am bit confused as woodie is showing 2 patterns for NIFTY one is ZERO LINE REJECT (which is continuation pattern) and other is VEGAS TRADE (which is trend reversal pattern),so please let me know which one is most probable.
VEGAS TRADE is marked with light yellow shade while ZLR is marked with green circle
i am bit confused as woodie is showing 2 patterns for NIFTY one is ZERO LINE REJECT (which is continuation pattern) and other is VEGAS TRADE (which is trend reversal pattern),so please let me know which one is most probable.
VEGAS TRADE is marked with light yellow shade while ZLR is marked with green circle
It doesnt mean the ZLR was a bad signal. As a trader we never know what price is going to do next. Which trade is going to be a big winner and which will be a small loss maker. The fact that CCI made you get out of a potential bad trade very early makes it a excellent trade.
This is a mindset issue. What we see on any chart is representation of the past data. Momentum in Price causes the indicator to move. Indicator do now cause price movement. Based on that we assume trend is in place and take action.
i am bit confused as woodie is showing 2 patterns for NIFTY one is ZERO LINE REJECT (which is continuation pattern) and other is VEGAS TRADE (which is trend reversal pattern),so please let me know which one is most probable.
VEGAS TRADE is marked with light yellow shade while ZLR is marked with green circle
Yes.....when CCI comes from 200 down to below 100 and hooks back, it can be taken as a ZLR when sidewinder is green or yellow and chopzone indicator shows a trend for 3 consecutive bars.....LSMA may or may not agree. Also CCI shuld rise by at least 20 points from previous bar. Then CCI has gone above 100..remained there for 2-3 bars and come back below -100...then exit your ZLR and take whatever small profit you have. Then the CCI breaks the swing low and heads to wards o line....if LSMA is positive and CCI heads towards o line with a good angle...that shows downward momentum is over and a trend is likely to change...so enter a long order to take it as a vegas trade.
Vegas trade and famir trades are stop and reverse trades...you enter in anticiaption of trend continuation....but exit immeadiately on the failure of ZLR and enter a opposite trade when LSMA agrees and CCI angel shows good momentum.....TCCI giives you early warning of the probable pattern forming.
Principle is to be with the market wherever it goes and be ready to take only that which market is ready to offer you.:clap:
WHY CCI IS A LEADING INDICATOR
Woodies has developed these 8 patterns on CCI and is of firm opinion that CCI is a leading indicator and it keeps you ahead of other traders who use lagging and standard indicators. There are many people who swear by woodies CCI or swear at CCI:lol:
These are my observations on CCI after 6 mths of trading the same system.
1. Many systems are based on MA...when the price approaches MA....enter the trade along the trend. Whether the price will bounce off the MA or it will penetrate the MA and enter the opposite side cannot be guessed when the price is hovering around the MA. CCI..however....already penetrates the zeroline and crosses the opposite side...at least 2 bars before the price penetrates the MA..thus it is a leading indicator
2. LSMA or least square moving average is the best MA out there acc to woodies and price crosses it long before it crosses simple MA.
3. trendline break on CCI indicator occurs at least 2 bars before trendline break on the price action...thus CCI gives an early indication of trendline break before standard tech analysts.
4. ghost pattern on CCI does not correspond to the head and shoulders pattern on price...the price may show a good trending pattern...however..the momentum is really waning and that can be seen only on the CCI.
5. The hallmark of tech analysis is momentum precedes price and no other indicator than CCI agrees with this.
Woodies has developed these 8 patterns on CCI and is of firm opinion that CCI is a leading indicator and it keeps you ahead of other traders who use lagging and standard indicators. There are many people who swear by woodies CCI or swear at CCI:lol:
These are my observations on CCI after 6 mths of trading the same system.
1. Many systems are based on MA...when the price approaches MA....enter the trade along the trend. Whether the price will bounce off the MA or it will penetrate the MA and enter the opposite side cannot be guessed when the price is hovering around the MA. CCI..however....already penetrates the zeroline and crosses the opposite side...at least 2 bars before the price penetrates the MA..thus it is a leading indicator
2. LSMA or least square moving average is the best MA out there acc to woodies and price crosses it long before it crosses simple MA.
3. trendline break on CCI indicator occurs at least 2 bars before trendline break on the price action...thus CCI gives an early indication of trendline break before standard tech analysts.
4. ghost pattern on CCI does not correspond to the head and shoulders pattern on price...the price may show a good trending pattern...however..the momentum is really waning and that can be seen only on the CCI.
5. The hallmark of tech analysis is momentum precedes price and no other indicator than CCI agrees with this.
This is how i look at it...
High, low and close of a price bar are equally important. Any indicator that skips the high and low and concentrates only on the close is at a disadvantage. meaning, high is the highest price bulls are willing to buy at, Low is the lowest price bears are willing to sell at. the battle ends after the time frame ends at the close. so a average of this 3 gives a better depiction of where the true value of that price bar is. This is called the TP (typical price) of the bar.
CCI plots the deviation of this TP from the simple moving average of the TP. A factor of 0.15 is used to keep 70% of the price range within the 100 to -100. Thats why most conventional CCI traders enters long when prices break out of the 100 mark and then exits when cci crosses the 100 mark from the top. This is one of the exit criteria of woodie.
Instead of watching price oscillating up and down, we are now concentrating on its movement away or towards the moving average. We now have a very good idea of the momentum of the trend. The stronger the momentum, more will the price move away from the moving average( or the zero line in cci). When profit booking kicks in or when the opposite forces decides to act, CCI reaches its elastic limit and makes a hook. Thats the exit criteria of woodie.
The most important and often most neglected aspect of woodie is the angle of the cci or ema-34 (CZI). If the angle is flat, it simply means there is no momentum. day traders are momentum traders and absence of momentum in a clear direction means a no trade zone. But most people see a buy signal on woodie on a flat day and jump in only get the SL hit and then make a conclusion.
The ghost pattern on cci is simply brilliant. ZLR, TT, GB100 are essentially the same thing. Intention remains the same. Woodie made the rules so that result is more mechanical and thats the reason behind its consistency.
We are not attempting to catch the top or the bottom. But we can manage to get a significant chunk of the middle.
Understanding why and how a indicator gives a signal is far more important than knowing "when". This is the differentiating factor between a successful trader and a struggling one.
High, low and close of a price bar are equally important. Any indicator that skips the high and low and concentrates only on the close is at a disadvantage. meaning, high is the highest price bulls are willing to buy at, Low is the lowest price bears are willing to sell at. the battle ends after the time frame ends at the close. so a average of this 3 gives a better depiction of where the true value of that price bar is. This is called the TP (typical price) of the bar.
CCI plots the deviation of this TP from the simple moving average of the TP. A factor of 0.15 is used to keep 70% of the price range within the 100 to -100. Thats why most conventional CCI traders enters long when prices break out of the 100 mark and then exits when cci crosses the 100 mark from the top. This is one of the exit criteria of woodie.
Instead of watching price oscillating up and down, we are now concentrating on its movement away or towards the moving average. We now have a very good idea of the momentum of the trend. The stronger the momentum, more will the price move away from the moving average( or the zero line in cci). When profit booking kicks in or when the opposite forces decides to act, CCI reaches its elastic limit and makes a hook. Thats the exit criteria of woodie.
The most important and often most neglected aspect of woodie is the angle of the cci or ema-34 (CZI). If the angle is flat, it simply means there is no momentum. day traders are momentum traders and absence of momentum in a clear direction means a no trade zone. But most people see a buy signal on woodie on a flat day and jump in only get the SL hit and then make a conclusion.
The ghost pattern on cci is simply brilliant. ZLR, TT, GB100 are essentially the same thing. Intention remains the same. Woodie made the rules so that result is more mechanical and thats the reason behind its consistency.
We are not attempting to catch the top or the bottom. But we can manage to get a significant chunk of the middle.
Understanding why and how a indicator gives a signal is far more important than knowing "when". This is the differentiating factor between a successful trader and a struggling one.
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