Rational CCI

2017년 12월 27일

The Rational CCI uses a variety of mechanisms to signal potential long / short entries, both on the long and short time frames.

Bullish crosses (typically buys) are encountered when the CCI crosses the EMA, and is in the Bearish/Oversold territory. Typically, one should aim to go long when there is both a bullish cross, as well as bullish divergence (higher low on the indicator, with equal to lower price).

This indicator also works great for detecting valid FOMO buys vs. getting in when there is not much juice left to squeeze. When there is a strong bullish move encountered that does not have a bearish crossover immediately preceeding it, these are considered strong breakout/momentum buys.

Bearish crosses (typically exits/shorts) are encountered when the CCI crosses down under the EMA and is in the Bullish/Overbought territory. Similar with the long entries, one should aim to exit long, or enter in a short when there is both a bearish cross, as well as bearish divergence (lower high on the indicator, with equal to higher price).

Lastly, similar to highly bullish breakouts/momentum peaks, strong bearish momentum is detected when there is a strong bearish movement that does not have a strong bullish move and/or bullish cross immediately before it.

On higher resolution time frames, the trading strategy is nearly the same -- however as mentioned before, it works best when there is both a signal + divergence.

While effective buy itself, I highly recommend employing this indicator in conjunction with your other favorites. I find it to work best with GodMode, LazyBear WaveTrend, and Willy's%R. If anything, this is a great indicator to use as confirmation when other indicators may be contradicting one another.