I coded this indicator to adapt a few techniques I learned from Constance Brown to CCI, which is a very good momentum indicator which gives great signals if you know how to read them. I plotted a few examples on the chart. As you can see, it complements a trader's bar chart reading skills nicely if applied correctly. Hope you can find it of use. Cheers, Ivan.
Keep in mind the averages don't look like the closed bar in real time, in order for them to displace, you need to wait at least 3 bars.
CCI will more or less look similar before closing and before the 3 bar lapse is done.
grahvity
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Thanks for the explanation. Very cool use of the indicator.
ingvar.pelleson
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you hit it spot on well done :-)
Tangent1
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why not simply buy when it was oversold the margin to earn is bigger
Tangent1
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@Tangent1, Also it seems the oscilator falls short when reachign oversold area so you dont see it meanwhile CCI shows it
IvanLabrie
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@Tangent1, it's just one way to use the oscillator.
I don't use it in this manner since I trade looking at bars mainly, and CCI secondarily, but I would buy if price action shows signs of reversal after it gets oversold, if we are in an uptrend for example.
CCI will more or less look similar before closing and before the 3 bar lapse is done.