How to trade with CCI indicator trading IQ Option

CCI MA Trend Follow Opportinity for Binary Options Trading

A basic definition of the trend is really a quotation’s general position in accordance with its average values. That’s why the MA indicator is absolutely indispensable in determining the current trend.

Unfortunately, the moving average doesn't show traders what point is ideal to say hello to the deal towards the tendancy direction. For that purpose many traders utilize the CCI oscillator.

A short outline of kinds of moving averages and the applications is included inside the explanatory video in regards to the indicator, located inside the MA settings window from the IQ Option platform.

Along with the video, we inform you about common strategies, using several types of moving averages along with indicators involved, with clear and brief explanations from basic to advanced levels.

The thought is simple – to work out a trend by using the moving average, enter using a basis of crossing the +100 degree of the CCI indicator curve.

Indicator settings

The three following questions arise when putting together any trading system :

1. Work timeframe ;

2. Indicator settings (indicator period, curve type to be applied inside the strategy) ;

3. Time to carry the positioning (option expiration) ;

A lot of issues arise regarding the selection of the moving average type. It is taken into account that the fundamental moving average gives lots of false signals on flat sections, and other kind diverge inside the presence of weight coefficients, giving the newest data greater importance.

The overall winner is that the exponential moving average, where influence using the nearest average values grows exponentially.

Natural selection has decisively resolved any disputes upon the usage of moving average investor periods of 50, 100 and 200. They're as used by analysts in reports and for this day they're set inside the trading platforms of portfolio managers. Let’s make an easy moving average having a period of 50 inside the IQ Option trading platform :

SMA settings. Period = 50

Indicator settings are directed to identifying a trend – CCI with period 14 and SMA with period 50 :

CCI (14) and MA (50) on trading chart

Upward trend

The signal in an upward trend’s inception is due to a candlestick crossed and closed above the SMA line. CCI readings ought to be greater than 100.

The figure below shows the features of upward trend inception : price crossing the moving average and quotations closing above the line (1).

Just keep waiting till the CCI indicator shows a importance of 100 or above (2). Using this method traders prefer to purchase options 3-4 candles ahead.

Downtrend

Just in case We're preparing to purchase a Put option, It's reasonable to wait patiently to the congruence of quotations crossing the SMA line top-down, with the value of closing the candlestick below this line and CCI decreasing with readings below 100, as shown inside the figure below. The intersection of quotations with SMA took place earlier on, so we don't enter.

Look forward to CCI to fulfill the right condition, see it in point 2, and hold for three timeframes (3).

The task of subsequent purchases of binary and turbo options for this trend is performed as follows. 

One intersection equals one trend ; thus, despite the undeniable fact that point 4 from the situation inside the figure above depicts the difficulty of actually finding quotes below SMA and newly appeared CCI signal below 100, which beforehand rose above that level, we don't enter this position here.

Indicator periods

Can it be possible to scale this trading method on various timeframes? The classic method involves the appliance of CCI + MA methods on daily candlesticks. Checking smaller timeframes, we affect the period from the moving average : for 4-hour candlesticks it is going to be 100, for 1-hour and below – 200, the CCI indicator stays at a similar 14 period. If you need to experiment, don’t look out for values of the period above 24.

Novice traders try to locate the most suitable values for indicators and systems via brute force or by searching in literature. They're Not alone in which make any difference, as investment institutions give similar tasks to mathematicians, the designers of latest indicators. The grail has still not been found. 

There exists already a very good perception of the existence of cyclical changes out there, but their parameters are constantly changing.

To reflect these changes precisely still appears to be impossible, as it's thereby to link their functional dependency to something and thus make a transparent prediction.

To get the best possible analysis, utilize the period values coming from the books of trading classicists, as they simply usually work consistently with the industry cycles.Source: Binary option trading indicator