Olymp Trade CCI oscillator

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Olymp Trade CCI oscillator

Our trade platform Olymp Trade cares about our customers and offer great promotions.

Learn More about Rate of Change Oscillator (ROC)

The ROC (Rate of Change) is an oscillator to measure the percentage change between the current pride and previous price. Traders use it to identify the oversold or overbought market.

Strength and Weakness of the Aroon Indicator

The Olymp Trade boasts a great reputation for convenience, efficiency and innovation. Moreover, the platform offers the Aroon indicator in the list of standard tools. Beginners and experienced traders use it to identify trend changes in the price of an asset, as well as the strength of the trend.

Fibonacci Retracement Levels in Olymp Trade Terminal

Fibonacci Retracement Levels are successfully used in a short-term trading strategy because they help to mark reversal points. They are also used on multiple time frames.

What is the Donchian Channel Indicator?

The Donchian Channel is a well-known indicator. Read more and learn to calculate the upper and lower bands.

CCI indicator: When, How and Why?

The CCI indicator stands for commodity channel index is a momentum-based indicator and belongs to the oscillator group of technical indicators.

Every trader (a beginner or an expert) knows the importance of trends. They are right. For decades, investors have been making their profits in the financial markets by determining the upcoming trends.

You should know that the market is of great importance when you open a position. It is also crucial to know when is the time to enter the transaction. Be aware of a U-turns otherwise you will end up in losses.

Even though traders use many indicators to help them to predict the trend, they consider CCI as one of the most effective tools. A successful trader D. Lambert introduced this indicator in the late1980s and it gained traction in commodity exchanges. D. Lambert developed the commodity channel index to identify the cycles in the commodity markets. As a momentum based indicator, the CCI index belongs to the oscillator group of indicators.

CCI widened its reach and applications since its introduction. It is often applied for electronic contracts.

You will find CCI among the standard indicators in the Olymp Trade platform.

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CCI Settings

Since CCI is a classical tool, it is shown in a separate tab under the price chart. The CCI indicator simply calculates and visually depicts how fast prices are rising or falling. The speed at which the price of a security rises or falls will tell you whether price will continue moving in that direction or not.

It represents one moving average between the levels of -200, -100, 0, 100 and 200.

If you want to use this indicator, use it to evaluate the trend. Look at the line in the intervals:

  • -200 to -100 indicates a down trend
  • 100 to 200 indicates a steady uptrend.

If you see a line moving between -100 and 100 in the opposite direction (towards 0), it indicates the reversal of the general trend. It is a signal to open a deal.

As for the settings, CCI should be used in selected timeframe. In other words, if you trade by the hour (60 minutes), then the indicator period must be set to 20 min.

If the interval is longer, it leads to a decrease in the volatility and, as a result, to a decrease in signals. And, if, on the contrary, the interval is shorter, then there will be more signals, but they will be less accurate.

We recommend following to the parameters proposed by Lambert.

Contract Trading Using CCI

As mentioned above, the main signal for buying an option is a change in trend.

We recommended purchasing Call at the moment when the line crosses the level of -100 in the upward direction.

It is recommended to execute Put, when the indicator crosses 100 on its way down.

The expiration should be equal to the formation time of 2-3 candles.

For example, if you trade on a 15-minute timeframe, then the contract should be valid for 30 to 45 minutes.

Conclusion

As described in this article, the CCI indicator is a powerful tool that traders can use as part of their technical approach. Having a good understanding of how to use a cci trading strategy can help traders in many ways. First of all, you don’t have to look at adding more redundant indicators to your chart as we have learned how the cci calculation is done.

In general, the CCI shows the overbought and oversold conditions. Thanks to the algorithm invented by the author, it does not lag and gives a minimum of false signals. Many beginners in trading usually apply a technical indicator using a uniform set of rules.

Take Advantage of the DeMark Oscillator

Olymp Trade Provides One of the Best Trading Tools Available

Olymp Trade provides its clients with a huge variety of different trading tools on their platform. One of the most unique is the DeMark Oscillator, which helps traders identify when markets are overbought, oversold, beginning new trends, and/or experiencing a trend reversal.

What is the DeMark Oscillator?

The DeMark Oscillator was created by one of the true innovators and pioneers of trading, Thomas DeMark. DeMark is responsible for a number of systems and strategies for analyzing market trends to create an understanding where trends were developing and when reversals would occur.

His analysis was sought after by many leading trading houses and the analytical tools that he had developed. Many of these tools are secretive or are extremely expensive to acquire, but several of his methods are widely available today for free such as the Tom Demark Indicator (DeMark Oscillator), which is available to Olymp Trade clients for free.

Other techniques and strategies like TD Sequential Indicator, DeMark Pivot Point Calculator, and the Demark Trendline Indicator are readily available online for traders wanting to develop detailed analysis skills.

The DeMark Indicator helps traders determine the best entry and exit points in the market in order to maximize their profitability. By taking data from previous timeframes, the indicator shows when markets are becoming overbought and oversold similar to other oscillators like the Relative Strength Index (RSI), but with different calculations.

How does it work?

The DeMark Oscillator is displayed by a set of values between 0 and 1. The base point on the indicator is .5 (center) and .3 and .7 on the indicator show points where the market may be oversold (.3) or overbought (.7).

The formula for determining these values is based on the preceding 14 periods by default, but can be expanded or contracted if the trader desires.

The indicator doesn’t have any smoothing typically, but the Olymp Trade model utilizes simple moving averages to smooth the chart. Additionally, the indicator can be displayed as a line or a histogram.

The indicator doesn’t calculate the closing levels of previous periods. It uses the highest and lowest trading points within those periods. Here is how it evaluates prices and creates a value when comparing two trading periods:

Numerator

  1. If the new trading high is more than the previous period, the difference between the two prices is given.
  2. If the new trading high is lower than the previous period, a value of 0 is given.
  3. This is done for each of the previous 14 periods (in the standard setting).
  4. The result is a Maximum average for the 14 periods and gives the calculator a numerator.

Denominator

  1. If the new trading low is lower than the previous period, the difference between the two prices is given.
  2. If the new trading low is higher than the previous period, a value of 0 is given.
  3. This is done for each of the previous 14 periods (in the standard setting).
  4. The result is a Minimum average for the 14 periods and this number is added to the Maximum average to give us our denominator.

Calculation

  1. The numerator is then divided by the denominator to give us a value between 0 and 1.

Formula

DeMarker Indicator = Avg Max Value / (Avg Min Value + Avg Max Value)

Fortunately, the indicator does all the calculations for the trader, which simplifies the process.

How to use the DeMark Oscillator when trading?

The DeMark Oscillator is most effective in a fast moving market and in conjunction with other indicators. Traders are advised to use it to determine trend reversal pivot points or in identifying new trends as they develop.

When day trading on the Fixed Time or Forex side of the Olymp Trade platform, look for points on the indicator below .3 or above .7. When the indicator moves past these points, it is a good sign that an entry or exit point in a position is best.

In the screenshot above, the red arrows near the DeMarker Indicator show points of entry for traders as they signal upward and downward trends as they crossover into the grey area of the indicator. The arrows on the price chart show what happened shortly after the Demark Oscillator provided us with the Buy and Sell entry points.

Conversely, the indicator also provided us with proper exit timing for our positions. As illustrated below, the red arrows show where the indicator showed that the price was moving towards overbought and oversold territory allowing us to close the positions profitably.

One Tool Doesn’t Make a Toolbox

While the DeMarker Oscillator is a valuable tool, it isn’t perfect. It is best used in conjunction with other tools like the RSI, CCI, Williams% and other tools when making trading decisions. Learning how to incorporate it into a strategy is highly recommended.

Of course, there is no “best” strategy or tool, but using the DeMark Oscillator as part of strategies such as Fibonacci Pivot Points, Camarilla Pivot Points, and DeMark Analysis, traders can reduce their risk of loss while improving their market timing.

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