Commodity Channel Index or CCI Indicator is one of the most popular and effective indicators used by traders to find possible trends and reversals. You can easily find and use CCI Indicator on IQ Option trading platform.
What is Commodity Channel Index?
Commodity Channel Index (CCI) is a momentum-based oscillator which has gained a huge popularity among traders. This indicator was developed by Donald Lambert. The main objective of this indicator was to help you identify the upcoming trends and reversals using the overbought and oversold levels.
In case you don’t know
Overbought and Oversold levels represent the price of an asset in relation to its true value which refers to extreme price levels where the price of an asset may be undervalued or overvalued. Overbought levels suggest that the price of an asset has risen far from its actual value. It suggests that the selling pressure by the sellers has reached the maximum value and from here, the price of an asset is likely to rise and buyers are ready to dominate the market. vice versa, The Overbought level is the price level which suggests that the security has attained the maximum value and from here, sellers are ready to dominate the market.
How to add Commodity Channel Index on IQ Option?
Firstly, log in to your IQ Option account. In case you don’t have access to your IQ Option account click here. Once, you signed up you will land on the trading dashboard. Secondly, click on the indicator button and search for the Commodity Channel Index in the popular section. Now, make necessary adjustments according to your trading nature and once you are done click apply.
Buy with Oversold Level
When the moving average line in the CCI indicator is below line -100. It signals a possible upcoming bullish trend reversal and here you can place a buy trade.
Sell with Overbought Level
Similarly, When the moving average line in the CCI indicator is above line 100. It signals a possible upcoming bearish trend reversal and here you can place a sell trade.
Combining CCI Indicator with WMA
Using a solo CCI indicator is a good strategy however, if you want to reap better results with this indicator you should try a trend combinator for Instance, In this article, I am going to combine the CCI indicator with WMA. Once you got a buy or sell signal with CCI Indicator you need to confirm your call with the WMA indicator.
In order to set the WMA indicator, click on the indicator button and search for moving average in the search bar next, click the name and change the type to WMA. next, change the period of the indicator to 21.
Now, when the price and the WMA line intersect each other it generates buy and sell signals. when the price intersects above the WMA line it signals a bullish trend and vice versa, when the price intersects below the WMA line it signals a bearish trend.