Hello, folks today I want to show you a strategy based on Commodity Channel Index (CCI) Indicator.
What is the Commodity Channel Index (CCI)?
The Commodity Channel Index (CCI) is a momentum-based oscillator used to help determine when an investment vehicle is reaching a condition of being overbought or oversold.
Developed by Donald Lambert, this technical indicator assesses price trend direction and strength, allowing traders to determine if they want to enter or exit a trade, refrain from taking a trade, or add to an existing position. In this way, the indicator can be used to provide trade signals when it acts in a certain way.
I will use the simple rules for the strategy:
-IF CCI -140 ENTER LONG, IF LAST 5 HIGHS OF THE BAR BELOW EMA 20
Enter long position
-IF CCI ABOVE 140 ENTER SHORT, IF LAST 5 LOWS ABOVE EMA 20
Enter short position
STOP: 1000 USD
TAKE: 5000 USD
This is how automated strategy is looking on the chart.
Now let’s make some magic with backtesting of the strategy.
As we see above during 2 years of trading strategy made over 32k USD. We can’t say that the equity performance was perfect, but at least strategy showed a profit in these difficult market conditions.
Lets look at Performance summary ($)
As we see above simple strategies are exist !)
The best trading strategy in the world won’t do you any good if you allow emotions to trump logic
PRICE: 70 USD