All CCI Binary Options Indicator

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Индикатор cci для бинарных опционов

Commodity Channel Index – Индекс Товарного Канала. Этот осциллятор создан в 80-х годах 20 века финансистом Дональдом Ламбертом для определения точек разворота цен на товарно-сырьевых рынках.

Во множестве прибыльных торговых стратегий за основу взят индикатор CCI для бинарных опционов. Его можно применять для любых стратегий на всех известных рынках. Визуально индикатор размещается на дополнительном окне под основным графиком (скриншот ниже).

Суть индикатора CCI

Основой для разработки индикатора послужило предположение о цикличности рынка, периодическом повторе его подъемов и спадов. Движение рыночных цен обусловлено постоянно повторяемыми циклами с известным интервалом.

CCI служит измерителем степени отклонения цены выбранного инструмента на данный момент от ее среднестатистических показателей.

Он может служить как основой торговой стратегии, сигнализируя трейдеру о моментах для покупки колл и пут опционов, так и вспомогательным инструментом в сочетании с другими индикаторами.

Описание индикатора

Этот осциллятор движется вдоль нулевой линии, периодически отклоняясь в плюсовую или в минусовую область к отметкам +100 и -100 (смотреть скриншот ниже).

При выставлении значения индикатора нужно проанализировать протяженность полного цикла (например, время от одного максимума до следующего, или от минимума до минимума). Значение должно быть равно его третьей части.

Если полный цикл выбранного для работы инструмента равен шести часам, то значение индикатора должно быть равно двум часам, и т. д.

По данным статистики, 70 % времени линия индикатора находится между отметками +100 и -100, и 30 % времени в диапазонах от 100 до 200. Именно эти 30 % времени являются рабочим периодом, на протяжении которого выставляются приказы на покупку пут и колл опционов.

Применение индикатора cci для бинарных опционов

Определение зон перепроданности, или перекупленности. Когда цена инструмента находится в пределах от -100 до -200, или от +100 до +200, это означает, что она занижена, или завышена, и возможен ее откат в противоположную сторону.

Когда ценовая линия пересекает отметку -100 снизу вверх, это служит сигналом для покупки колл опциона. При движении индикатора через отметку +100 сверху вниз нужно покупать пут опцион.

Четким подтверждением правильной трактовки сигнала является пересечение ценовой линией нулевой отметки. На рисунке ниже стрелками обозначены моменты для покупки опционов.

Использование дивергенции (расхождение, разногласие) – одного из наиболее надежных и четких сигналов для входа в рынок. Это показатель того, как поведет себя рынок в ближайший момент.

Языком трейдинга дивергенция интерпретируется, как расхождение направления движения индикатора с направлением движения ценовой линии.

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Этот феномен наблюдается в моменты достижения рынком своего пика, и отсутствием силы для поддержания текущего направления.

Общеизвестным является тот факт, что цена инструмента постоянно совершает скачки вверх и вниз, даже в тренде. Выбранный индикатор четко следует за направлением цены, прорисовывая подъемы, спады, минимумы и максимумы.

Дивергенция происходит, когда цена на графике показывает максимум выше предыдущего, а осциллятор демонстрирует максимум ниже предыдущего. Пример дивергенции растущего тренда на рисунке ниже.

Аналогичные ситуации происходят и на падающих трендах.

Если наблюдается дивергенция на растущем тренде – покупаем пут опцион. Дивергенция на спадающем тренде – готовимся к покупке колл опциона.

Зоны крайней перекупленности и перепроданности
Пересечение линией индикатора отметок +200 и -200 является показателем скорого разворота тренда. В этих зонах следует воздержаться от торговли.

При пересечении индикатором линии +200 в направлении нулевой отметки покупаем краткосрочный пут опцион. Если индикатор движется в прежнем направлении, и пересекает отметку +100, покупаем пут опцион со средним сроком експирации.

Аналогично действуем и при растущем тренде. Пересечение индикатором отметки -200 в направлении зеро – покупка краткосрочного колл опциона, продолжение движения через -100 – покупка опциона колл со средним сроком исполнения.

Стратегии торговли бинарными опционами с использованием CCI

Самой известной стратегией является WOODIES CCI, имеющая армию поклонников, и всевозможные группы и клубы по ее обсуждению и усовершенствованию. Ее автор – известный трейдер Кен Вуди.

Для торговли используются два графика осциллятора CCI с разными значениями. Эта стратегия имеет много шаблонов и разновидностей, и отличается доступностью и простотой в использовании. Все, что требуется от трейдера – поиск шаблонных ситуаций, и покупка опционов в соответствии с определенными сигналами.

Также популярной является стратегия, получившая название ZERO CCI. Сигнальной линией здесь выступает нулевая отметка. При пересечении индикатором линии зеро сверху вниз покупаем пут опцион, при пересечении снизу вверх покупаем колл опцион.

Итоги и рекомендации

  1. Индикатор CCI является надежным рыночным инструментом. Параллельное использование его с другими индикаторами (скользящие средние, MACD, Stochastic, RSI, и другие) дает возможность с успехом использовать его практически на любых рынках.
  2. Одним из недостатков этого инструмента считают то, что он создан для рынков с выраженной цикличностью. Те инструменты, у которых тяжело отследить цикличность, требуют очень тонкой настройки CCI опытным пользователем.
  3. Наилучшие результаты с использованием CCI получены при торговле индексами, а также акциями.
  4. Валютные пары меньше подвержены цикличности, поэтому с ними этот индикатор рекомендуется использовать совместно с другими.
  5. Новичкам для ознакомления рекомендуется протестировать этот осциллятор на демо платформе.

Если внимательно разобраться с вышеперечисленными нюансами, торговля по индикатору CCI бинарными опционами станет понятным и довольно прибыльным занятием.

CCI — What Is It? How to Use Indicator in Trading

CCI (the Commodity Channel Index) first appeared in specialised literature in the late 1970’s. Donald Lambert created the CCI indicator to analyse commodity markets, but the market history has proven that if CCI “works,” it can be applied to all financial sectors. The currencies, securities and derivatives markets are impractical and overly emotional.

This is evident in the unending cycle of crises alternating with periods of economic recovery. The market reaction to these events is excessive. The ups and downs are so extreme that it sometimes leads to the collapse of individual corporations, and in rare cases, even governments. But eventually the world economy always reverts back to the average state.

What is CCI?

Donald Lambert suggested CCI calculating the stable intervals of fluctuations in the commodity markets, and to consider any unusual deviations from these norms as a sign to enter in the opposite direction, assuming that the system will recoil from the extreme values and gravitate back to the middle.

In most cases, Lambert is right. If we set the indicator to “fast” (the CCI is displayed under the quotes chart), we can look at where the CCI line exits the “standard channel” and see that in four cases the indicator is right (1), but in the fifth case (2), the price “took off”.

In four cases the indicator is right (1), but in the fifth case (2), the price “took off”.

What is wrong in the fifth case? The problem is the type of indicator. It is an oscillator, a flat indicator that “folds” when a trend appears. As long as there are price fluctuations within a steady range, CCI detects reversals perfectly. As soon as the price of the asset gains momentum in a certain direction, false signals start.

The CCI Formula

Let’s look at what’s under the hood in order to understand how to correctly use this indicator’s algorithm. If you start to panic when you see a mathematical formula, you can just skip to the next section. But it is useful to understand how this tool works so that you can get the most out of it. The stream of market transactions forms a candle with four price points: opening (1) and closing (2), and two extremes – the high (4) and low (3).

Donald Lambert used the average price of the extremes plus the closing price, and called it the typical price (tp):

By making this calculation for each candle in the chosen period, we can get the average values using the simple moving average SMA(tp):

The task of determining the stable price channel is solved by averaging all ranges of deviations of the typical prices from their mean Moving Average Deviation (MAD). The deviations are taken in modulo (in absolute values).

Once the problem of the channel has been solved, we just need to compare the position of the current deviation of the typical price:

relative to the established MAD. But what will serve as a benchmark for the level of “normal” deviation?

Donald Lambert chose a factor of 2/3, based on the probability density of normal distribution. We all remember the “three sigma rule.” There is a probability of 99.73% that random values lie within three deviations, and going outside 2 of them will cause correction. This is a general approach used in many indicators of this kind:

2/3 = 1/0.015, and the final CCI formula is as follows:

The levels that define the channel are taken as 100 (+100 is the upper limit and -100 is the lower limit). Just as for any oscillator, overbought and oversold levels are intrinsic to CCI. In a flat market, the price rarely leaves the channel.

How to Use CCI Indicator – Trading Strategies

There are two basic strategies for using CCI the oscillator: crossing the +100 and -100 levels.

Buy the asset when the CCI line crosses +100:

Sell the asset when the CCI line crosses -100:

To trade in flat channels, open a deal when it crosses 100 and reverses back lower or higher than this level. The picture below shows what a CCI signal to sell looks like:

A method to buy in a flat channel looks like this: wait for the line crossing the -100 level, get ready to trade, and when it reverses and crosses the same level going up, it’s time to enter (buy the instrument).

CCI Strategy

There are break-even, trend, and counter-trend strategies to use CCI.

Break-even strategies haven’t lost their relevance due to the well-developed “step” approach for market-makers building a position.

How does it work? Each asset has firms that specializes in this instrument and trade in it continually on both sides of the market. Thanks to market-makers, any customer can buy or sell currencies 24 hours a day and always receive the “market price” without fail. Major financial institutions use the services of market-makers. A large amount of capital should enter the market gradually, so as not to raise or lower the entry price for itself. So flat market conditions might actually represent a building position. When the news hits the market, all the traders rush to trade on “that side”, while the market maker “gives away” their previously gained position in bits, and might even set up a new one at the peak of this movement.

The market is presented as a series of flat sections of a set of positions, followed by the quotes rising to the “new level.”

Trading with the trend

A different approach insists on trading with the trend, assuming that even a bad entry that brings a loss will be “pulled out ahead” after the trend corrects.

The counter-trend strategy is most often used by scalpers, day traders with a large number of transactions (trading turbo options). By passing up the trend to avoid a chase, scalpers “catch” the correction using a counter-trend strategy.

To create a strategy, we need to have a number of primary and secondary indicators. Key indicators serve as signal “donors”. They are used for entering a trade on the asset (buy or sell). As mentioned earlier, all indicators have a certain number of false signals. When there are a lot of them, it is because an oscillator designed for trading in flat mode is used in a section with directional movement.

To filter out these signals, it would help to use a trend indicator, but this type of indicator also lies during sideways movement. So we need filters that determine whether there is a directional trend on the market or it’s flat.

CCI is ideal for creating a trading system because, as we’ve seen, the indicator’s algorithm gives entries both on a trend and on a flat. Our goal when creating a trading strategy is to select filters that detect the state of the market: flat or trend. Ideally, these additional filters would help us to include elements of counter-trend trades in our strategy.

Now that we’ve defined the concept of our strategy and set our objective with CCI as the signal donor, we can begin choosing filters for it.

NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.
In accordance with European Securities and Markets Authority’s (ESMA) requirements, binary and digital options trading is only available to clients categorized as professional clients.

GENERAL RISK WARNING

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
87% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Commodity Channel Index

Commodity Channel Index is an oscillator based on measuring the momentum of a trend. It was initially developed to trade on Commodities. However, CCI indicator showed profitable performance, and effectiveness of its trading signals made the indicator popular to use in other types of trading in the financial markets including binary options. The oscillator shows overbought and oversold conditions of an underlying asset price, indicates phases of a trend and shows periods when the current trend is getting exhausted.

Binary options trading strategy based on CCI is flexible as it can be effectively applied for both trending market conditions and range bound choppy price action. Several technical indicators can be added to CCI strategy in order to increase efficiency, cut unnecessary noise and fit requirements for an individual trading algorithm. The method is suitable for trading on any asset class including currencies, commodities, stocks and cryptos. Thanks to the universal mathematical formula, CCI works well on any timeframe so traders can choose any expiration time of binary options.

What is the Commodity Channel Index?

Commodity Channel Index shows the market momentum. In contrast to other types of widely-used oscillators such as Relative Strength Index or Williams %R, CCI indicator does not have fixed ranges. That feature allows the indicator to point to strong trends with extreme values of the wave range and compare the power of possible retracements. Other conditions are the same. CCI chart has adjustable oversold (positive value) and overbought (negative value) levels and the middle line at zero, which divides bullish and bearish phases of the asset quotations.

CCI chart may have divergences, patterns based on the difference of the price action compared to the indicator’s performance. These patterns usually indicate periods when a trend is getting weaker and the likelihood of reversal gets higher.

How does CCI indicator look like?

The indicator is placed under the price chart in a separate window and looks like this:

CCI indicator settings

Default CCI settings are as follows:

  1. Period – 20 bars (days or hours depending on the chosen timeframe of the price chart);
  2. Overbought level: +100. Traders can set +120 as the overbought level to lower the indicators sensitivity or +80 to increase the number of trading signals ;
  3. Oversold level: -100. It can be shifted to -120 if traders prefer lowering the threshold or to -80 to have more frequent entries;
  4. Source – close price. The CCI calculation can be applied to open, high or low rates.

The essential parameter in CCI indicator settings is the period as it takes into account close rates for all of the previous candlestick or bars. In most cases, it’s recommended to leave the period unchanged as it was designed especially to balance the relation of short- and long-term analysis. However, different approaches to trading algorithms based on expiration time might require a longer or shorter period of the CCI indicator. For example, binary options traders looking for long-term investment could take benefit of the period 34 bars on the daily timeframe, while short-term scalpers might get more frequent entries thanks to a lowe period of 13 bars on the 15-minute chart.

How to calculate CCI

Commodity Channel Index formula has several intermediate variables to be calculated separately. First, there is such a term as the Typical Price, which consists of a sum of high, low and close prices divided by three. The formula adds all of the typical prices for every bar in the chosen period, which implies additional smoothing. Second, Mean Deviation is the mean of the difference between the Typical Price and Moving average divided by the number of bars in the period. The deviation in the formula plays a role of volatility indicator, which helps CCI to reflect strong trends.

The CCI formula is as follows:

CCI = (Typical Price – MA) / (0.015 * Mean Deviation)

Where:
Typical Price = Sum <1 to p>((High + Low + Close) / 3),
P = number of periods,
MA = Moving Average of the Typical Price,
Mean Deviation = Sum <1 to p>(|Typical Price – MA|) / p,

CCI trading signals

CCI patterns and trading signals can be divided depending on the price action they describe. Continuation patterns confirm the current trend direction, while reversal patterns are supposed to show a counter-trend reversal.

Let’s have a closer look at some of them:

Commodity Channel Index continuation patterns

When a downtrend had bottomed out and asset price bounces off a certain support level, pointing to strong demand for call options at that level, CCI starts to come off the oversold territory. In case if the indicators line crosses the threshold of zero, which divides the bearish and bullish phase of the trend, then the oscillator shows a potential continuation of the upswing. Therefore, this signal can be used by binary options traders to start the trading cycle of buying call options more aggressively, including larger volume and shorter expiry. The bearish continuation pattern is the same but mirrored. CCI has to cross the zero line after peaking around the overbought level in order to confirm the reversal of the trend. In this case, put options are getting more attractive.

Commodity Channel Index reversal patterns

The key line to monitor possible reversals is overbought or oversold level. In case if CCI bounces off it, charting a sharp whipsaw, then the change of the market sentiment is highly possible. Another case happens when CCI enters the overbought or oversold level during a strong trend but gets back out of the zone after some time. The moment when CCI crosses the overbought threshold from above or oversold line from below is considered as an entry signal.

There are also reversal patterns based on so-called divergences. Imagine an uptrend, which is getting exhausted at some level. The bulls are trying to push the price higher, but they face strong resistance from put-option buyers. As a result, the volatility is getting lower, the range of candlesticks is squeezed. The price chart keeps drawing higher highs, but CCI reflects the action by lower highs. This pattern is called a bearish divergence and it indicates a possible reversal of the recent uptrend.

How to use the Commodity Channel Index?

CCI strategy is simple and profitable. However, rules and conditions have to be executed thoroughly, while traders should keep in mind risk management rules.

Here is the list of conditions for binary options trading cycles according to the trading system:

Conditions to buy Call options on the oversold level

  • If a downtrend was pushing the indicators line toward the oversold territory, but the crossover of the threshold did not happen and CCI bounced back up, then traders should start buying call options.;
  • The trading cycle has to be continued in case if the oscillator crosses the zero line from below;
  • If CCI indicator tested zero value but failed to breach it, traders should stop the cycle of buying call options;
  • If the upside swing continues, traders should keep buying call options until the CCI indicator reached the overbought level.

Conditions to buy Call options on the oversold territory

  • If CCI chart stayed at the oversold territory during a downtrend, while the asset prices had bottomed out and started reversing, the moment when oscillator’s line crosses the oversold line from below is considered as the trading signal to start buying call options;
  • Continue the trading cycle in the same direction until CCI charted an opposite reversal signal or bounced off any of the resistance levels such as zero line or overbought level.

Conditions to buy Call options on the level of 0 from below

  • After a downtrend reversed and an asset price had found a bottom, CCI should start edging higher from the oversold or bearish territory;
  • If CCI breaks above 0, start buying call options;
  • Keep the trading cycle if the asset price is heading into the right direction and CCI is charting higher highs;
  • Continue the trading cycle until CCI reached the overbought territory or bounced off it;
  • If CCI bounces back below 0, stop buying call options.

Conditions to buy Put options on the overbought level

  • If an uptrend was lifting the indicators line toward the overbought territory, but the crossover of the threshold did not happen and CCI bounced back down, then traders should start buying put options;
  • The trading cycle has to be continued in case if the oscillator crosses the zero line from above;
  • If CCI tested zero value but failed to breach it, traders should stop the cycle of buying put options;
  • If the downside swing continues, traders should keep buying put options until the CCI indicator reached the oversold level.

Conditions to buy Put options on the oversold territory

  • If CCI stayed at the overbought territory during an uptrend, while the asset prices had peaked and started reversing, the moment when oscillator’s line crosses the overbought line from above is considered as the trading signal to start buying put options;
  • Continue the trading cycle in the same direction until CCI charted an opposite reversal signal or bounced off any of the support levels such as zero line or oversold level.

Conditions to buy Put options on the level of 0 from above

  • After an uptrend reversed and an asset price had found a top, CCI should start edging lower from the overbought or bullish territory;
  • If RSI breaks below 0, start buying put options;
  • Keep the trading cycle if the asset price is heading into the right direction and CCI is charting lower lows;
  • Continue the trading cycle until CCI reached the oversold territory or bounced off it;
  • If CCI bounces back above 0, stop buying put options.

Examples of strategy based on the Commodity Channel Index

Buying Call options on a bounce from the oversold level:

Buying Put options on CCI coming out of the overbought zone:

Buying Call options with a bullish divergence on CCI:

Buying Put options on a breakout of the CCI middle line from above:

If you like this strategy, you might also be interested in this Donchian Channel Indicator

Combination of different technical indicators with CCI

As far as CCI is an oscillator with quite a sensitive formula, it reflects almost every wave of the price. Several trading approaches are based on a lower number of entries and additional filtering of the market noise. This requires adding a technical indicator with a different formula in order to increase the efficiency of the trading system. Trend indicators are the most suitable ones for this case. MACD, ADX and Ichimoku Cloud are the most popular among them. The main idea for such a combination of indicators is that the signal coming from CCI has to be double-checked and confirmed by the trend indicator. If, for example, MACD has a negative histogram in a moment when CCI bounced off the oversold zone, the signal is ignored.

Another way of filtering false signals is to add a set of simple moving averages with different periods together with an envelope channel indicator. This combination shows several levels of technical support and resistance on the price chart, and when the CCI overbought/oversold level is reached at the same time with a test of resistance/support, the trading signal is more reliable. For instance, binary options traders could consider using CCI technical indicator together with a simple moving average with the period 89 bars, exponential moving average with the period of 21 bar and Bollinger Bands indicator with the period of 21 bar. A demo-account backtest of any trading strategy would help increase its efficiency and maximize profitability before using it on the real-money account.

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