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Forexcube Nov 10, 2011 1:53pm | Post# 1

TASAYC System
 
6 Attachment(s)
TASAYC
Trade as simple as you can

This simple & effective TASAYC-System appropriates only the Pivotals and the CCI-Indicator and some Trends-Lines sometimes and could be used in Trending- as in Ranging Markets. You could learn how to incorporate these technical indicators into your analysis to improve your trading decisions. You can put more things into it if you like (Example #1715). The Multiple-Time-Frame-Analyse keeps you out of bad trades as well as keeps you from over trading.

Be aware
Despite the nonexistence of the magic formula there are certainly high probability ways of trading the forex market. At FF the most comments are focused on the Method part, but you need to combine Method with both Money and Mind in order to attain success in the trading business.

This thread hasn't the intention to get hold of the Holy Grail, whether it truly exists or not. A lot of traders seek the perfect formula that is capable of predicting with 100% accuracy the future price movements. Want to know where it lies? It only exists in the creative part of the mind - together with fairies and gnomes.

I believe that an important factor of trading success lies in the matching of Method with the trader's own personality and trading style.

"TASAYC" could be also used with Strategies like "Breakout Fading" or "Breakout Trading" or "Decreased Volatility Breakout" or in trends with steep gradients depending on your own risk appetite and could put in in other trading styles or in confirming trend direction and trend strength with oscillators (e.g. Stochastic, MACD). You can let it simple or could use it in a more complex way.

Currency Pair: all
Time Frames: all

Disclaimer:
Any trade or analysis related comments made in this thread by myself or any other person should not be interpreted as anything other than a point of view by the respective poster. Trading rules may be subject to interpretation. It is your responsibility as a trader to decide what information to use and what to disregard and you do so at your own risk. Use the ideas and/or modify them to suit your trading style. I recommend testing your trading system on demo account before investing real money.

Planned risk levels may be increased dramatically under extreme market conditions.

I will give examples here and there of my trading style when I have the time and the love to do it.

For Beginners: Look also at
"25 Rules of...", p.80, #1198;

You could attend this trading mass if you like it - if not keep moving!
---
Tading the CCI(14) Top & Bottom in close contact with the Bollinger Bands and/or Divergence and/or the Pivotal Points
Trade Examples
Scalping Trade, EURUSD, M5/M1, 2011 November 10, p.1,
#6; EURUSD, M30/M1, 2011 November 10, p.1, #7; Multiple-Time-Frame-Analyse, EURUSD, M5/M15/M30 & EURUSD, M1, 2011 November 10, p.1, #11 & #12; CCI-Top-&-Bottom-Trading with Divergence & the Pivotals, EURUSD, H1, 2011 November 12, p.3, #35/#36; Labeling, p.3, #37; Exit Trade Example, EURUSD, H1, 2011 November 12, p.3, #38; CCI(14) Top & Bottom Trading with the Bollinger Bands, the Divergence and the Pivotal Points, GBPCAD, H1, 2011 November 13, p.3, #43; Time-Cell-Trading, EURUSD, M1/M5/M15/M30, 2011 November 15, p.4, #49; CCI(14) Top & Bottom Trading & the Pivotals, EURUSD, M5, 2011 November 22, p.12, #180; How I decide to trade sometimes, GBPAUD, M1-Monthly, 2011 November 28, p.22/23, #327-#336; EURGBP, H1, 2011 December 01, p.27, #397; Loss Order Management (LOM ) - Fragmentation, p.36, #526; Loss Order Management - Right Calculation - Profit per Day, p.36, #527; For what reason making a Multiple Time Frame Analysis? - Example 1, EURUSD, M5/M30, 2011 December 08, p.43, #636; Trade Example - Multiple Time Frame Analysis with the CCI-Indicator, USDSGD, H4/Daily/Weekly/Monthly, 2011 December 15, p.54, #800, #801; Loss Order Management (LOM ) - Ratio 1:10, p.55, #812, #813, p.56, #826; Loss Order Management (LOM) - Compensation with other trades, p.55, #814; LOSS Order Management (LOM) - Compensation with other Trades, p.55, #821; Loss Order Management (LOM) - Equity, p.56, #831; CCI and the Limit - Trade Example: EURUSD, M1, 2011 December 16, p.56, #836; Loss Order Management (LOM) - Open Trades/Closed Profit Trades, p.56, #837; Loss Order Management (LOM) - Overview, Link, p.59, #883; How to read Crodzilla's CC-New Indicator - GBPAUD, H4, 2012 January 04, p.70, #1042; How to read Crodzilla's CC-New Indicator - USDCAD, H4, 2012 January 04, p.70, #1047; Loss Order Management (LOM) - Last Step, p.76, #1129; Closed Accounts within 50-200% Profit Range - Why?, p.76, #1134; GBPNZD - Multiple Time Frame Analysis (MTFA), p.77, #1151; Multiple Time Frame Analysis (MTFA), EURUSD, H1/H4/Daily, p.94/95, #1409,#1410,#1411,#1412,#1413; How to read a Divergence with CCI & RSI, EURUSD, M30, 2012 January 30, p.95, #1421; Simple Trading with different Entry Points (STEP), EURUSD, H1, 2012 February 04, p.103, #1538; Loss Order Management (LOM) - 2012 February 06 - Daily Example, p.108, #1616; Loss Order Management (LOM) - Example, p.112, #1668; Loss Order Management (LOM) - Formula, p.112, #1669; Loss Order Management (LOM) - Formula A, Formula B, p.113, #1683; Loss Order Management (LOM) - What does that tell you?, p.113, #1684; Scalping Trading with Road Blocks, p.114, #1707;
---
Constitutive Ideas
Constructive inputs to make CCI-Trading more efficient.
"Porfirio's" CCI-Trading-System (H1/M15/M5), p.25, #369;
Cordial thanks to Porfirio!
Indicators:
"Crodzilla's" Latest Version: !CCI-Divergence-Master-v13c.mq4, p.91, #1364; !crodzilla-cci-divergence.tpl, p.69, #1032;
See also: "Crodzilla's" ExtremeHook_v2.mq4, p.69, #1023; Explanation: p.71, #1060; #1062; p.72, #1067;
[Archiv: "Crodzilla's" CCI-Current-Divergence-Indicator, Introduction: p.27, #391; CCI-Current-Divergence-v7.mq4, p.32, #471, further developed: CCI-Current-Divergence-v11.mq4 , p.41, #611; Explanation: p.41, #610, #611, #613, #623; CCI-Current-Divergence-v12a.mq4, p.59, #872]; !CCI-Divergence-Master-v12.mq4 , p.74, #1103; CC-New.mq4, !crodzilla-cci-divergence.tpl, p.69, #1032; !CCI-Divergence-Master-v13b.mq4, p.83, #1241], Introduction: p.100, #1500;
Cordial thanks to Crodzilla!
---
Important Aspects - Contributions to a Discussion
"infinitus", p.72,
#1069; "bit9ret" p.73, #1094; "crodzilla" p.74, #1096; "landsat" p.74, #1097; "bitret" p.74, #1098; #1099; #1100; "Forexcube", p.75, #1112; "bfree", "25 Rules of...", p.80, #1198; "bfree", Demo versus Live Account, p.84, #1253; "bfree", p.84,#1254;
---
Forex Articles & Links

Channel Breakouts With The CCI, p.2, #16; Commodity Channel Index (CCI), p.2, #17; CCI Download Box - Link, p.2, #18; Fundamentals of Trading with CCI Indicator, p.2, #19; CCI and its Zero Line, p.2, #20; CCI overbought & oversold zones, p.2, #21; Summary: CCI Indicator Signals, p.2, #22; CCI Trading Walkthrough, p2, #23; CCI ("Commodity Channel Index"), p.2, #24; CCI Divergence Trading - A Simple System You Can Use, p.2, #25; How To Use the CCI Indicator, p.2, #26; Timing Trades With The Commodity Channel Index, p.2, #27; PA 50 CCI Forex System, p.2, #28; Trading Forex with Woodies CCI, p.2, #29; What Is Woodies CCI?, p.2, #30; Bullish Divergence Forex Trading Example, p.2, #34; Divergence Trading, p.8, #119; Complex Trading System (MACD Divergence), p.9, #121; Divergence Forex Trading Strategy, p.9, #122; CCI Divergence Trading - A Simple System You Can Use, p.9, #123; Complex Trading System (CCI Divergence Breakout), p.9, #124; CCI Divergence Trading, p.9, #126; Forex Strategy Trend Line & CCI Divergence, p.10, #139; Price Action: A Short-Term Trading Approach, p.19, #281; Price Action - Links, p.19, #282; Price Action Forex Trading Explained, p.19, #283; Forex Price Action Trading Strategy, p.19, #284 & #285; Multiple Time Frame Analysis, p.33, #482; Trading Multiple Time, p.33, #483; Timeframe Analysis, p.33, #484; Multiple Time Frame Analysis for Forex, Futures, and Stock Traders, p.33, #485; Spot Forex Trading - Multiple Timeframe Analysis for the Spot Forex, p.33, #486; Trading Sessions, p.39, #575, #576; Trading Forex Without Stop Loss?, p.40, #597; Forex Trading Secrets - No Stop Loss Strategies, p.40, #599; Stop Loss?? I Don't Want To Use It, p.40, #600; Triangles, p.44, #656, #658; Understanding Forex Risk Management, p.50, #737; Forex Risk, p.50, #738; Forex Scalping: A High Risk Strategy, p.50, #739; High Risk Investment, p.50, #740; High or Low Risk Rate, p.50, #741; The New Risk-Factor For Forex Markets, p.50, #742; Hidden Divergence, p.106, #1585; How to Trade Divergences, p.106, #1587, #1588; "Do The Right Thing" For Trade Breakouts, p.119, #1778; Forex CCI Indicator Explained, p.119, #1779, #1780;
---
Potpourri
Online-Broker-Vergleich 2011: Die Günstigsten, p.9, #128; Choosing a Forex Broker, p.9, #130; Test Your Forex Broker With A Demo Account, p.9, #131; Top 10 Tips For Choosing Reliable Forex Trade Broker, p.9, #132; How to Choose a Forex Broker, p.9, #133; ECN Forex, p.9, #134; New - Links, p.20, #285; World Clock, p.20, #300; Martin J. Pring's 19 Trading Rules to Beat the Market, p.21, #305; John Murphy's Ten Laws of Technical Trading, p.21, #306; Top 4 Things Successful Forex Traders Do, p.64, #952; 4 Factors That Shape Market Trends, p.64, #953; Trade with Multiple Brokers, using the same MT4 Terminal, p. 86, #1280; Forex Trading Hours, p.103, #1532; Forex Market Hours, p.109, #1635; Forex Trading Hours, p.110, #1637; The Best Times to Trade the 24-Hours Forex Maket, p.110, #1638; Sternstunde Philosophie: Tomáš Sedláček – Ökonomie: nichts als Moral, p.105, #1565; Trend Indicators-MT4, p.114, #1698; Momentum Indicators-MT4, p.114, #1699; Volatility Indicators-MT4, p.114, #1700; Volume Indicators-MT4, p.114, #1701; Cycle Indicators-MT4, p.114, #1702; Bill Williams' Indicators-MT4, p.114, #1703; The Best of Indicators-MT4, p.114, #1704; Leading versus Lagging Indicators, p.114, #1709; Hundreds of MT4-Indicators, p.115, #1721;

---
Indicator & Template
See "Attached Files", p1, #1, please.
CCI,Pivots,123PatternsV6.tpl > first time imported, p.7, #101, please.
"Crodzilla", !CCI-Divergence-Master-v13c.mq4, p.91, #1364; "Crodzilla", CC-New.mq4, p.61, #914;
---
Basics of Forex - Theoretical Foundations
http://www.babypips.com/school/
http://forex-strategies-revealed.com/
http://stockcharts.com/help/doku.php?id=chart_school
---
Helpful Tools
Pivot Points, Link: http://www.actionforex.com/markets/p...2010040848154/
---
Music
Michel Petrucciani Trio - Cantabile, p.33,
#487;
---
Expression of Thanks
Your work is excellent, crodzillal!, Cordial thanks!, Thank you for being so cooperative. Deep gratitude!
FXcube
---
Blind Flight
Only for testing purposes.
Introduction: BF*, p.98,
#1464;
---
Longer Term Trades - Evaluation
Rating Table, p.121,
#1813;
---
Open Account
No open accounts anymore since 2012 February 20, see #1818, please.
---
Closed Accounts
I never publish Real Accounts!
Accounts will be closed when they have crossed the 50%-Profit-Limit or more (max.200%).
Deposit: 25'000.-$, Beginning Date: 2011 September 13, Closed at 2011 October 10, Equity: 75'971.92$, Profit: +50'971.92$, (203% within 1 month!), History File, see p.24, #360;
Deposit: 100'000.-$, Beginning Date: 2011 December 05, Closed at 2011 December 09, Equity: 160'854.09$, Profit: +60'854.09$ (60% within 1 week!), History File, see p.48, #714;
Deposit: 250'000.-$, Beginning Date: 2011 December 15, Closed at 2011 December 19, Equity: 415'281.41$, Profit: +165'281.41$, (66% within 1 week!), History File, see p. 60, #894;
Deposit: 10'000.-$, Beginning Date: 2011 December 22, Closed at 2011 December 28, Equity: 15'385.71$, Profit: +5'385.71$, (50% within 1 week!), History File, see p.63, #933;
Deposit: 500'000.-$, Beginning Date: 2011 December 28, Closed at 2012 January 06, Equity: 1'518'055.28$, Profit: +1'018'055.28$ (200% within 2 weeks!), History File, p.76, #1138;
Deposit: 50'000.-$, Opening Day: 2012 January 31, Closed at 2012 February 07, Equity: 131'468'63$, Profit: + 81'468.63 (+162% within 6 Trading Days), History File, p. 109, #1629;
Deposit: 10'000.-$, Beginning Date: 2012 February 07, Closed at 2012 February 16, Equity: 18'922'92$, Profit: + 18'922.92, (+89% within 10 Trading Days), History File, p. 102, #1822;
---

End
This thread was closed by FXcube at 2012 February 20, see p.122, #1823
.

PivotsD_v5.mq4
cci, pivotal.tpl
cci14,sma200,bb2_20,3_20,pivotal.tpl
cci,pivots, 123patternsv6.tpl
123PatternsV6.mq4
!CCI-Divergence-Master-v13c.mq4

Forexcube Nov 10, 2011 1:58pm | Post# 2

1 Attachment(s)
Only for demonstration purposes.
2011 November 10
Real Account:
Equity: 82.33$
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kester Nov 10, 2011 2:10pm | Post# 3

I hope to learn more from this, as it look so simple

only1kader Nov 10, 2011 2:11pm | Post# 4

im in.....

lets see what we can learn from you...


thanks
kader

finally Nov 10, 2011 2:29pm | Post# 5

so far so good.

Forexcube Nov 10, 2011 2:50pm | Post# 6

3 Attachment(s)
EURUSD, M5, 2011 November 10
EURUSD, M1, 2011 November 10

Trade Example - Scalping:
Here I am in at M5 and go out at M1 a little moment later concernin the trading after the London Close.
Profit: 6 Pips (1.35917 - 1.35981)

The most of time I trade the Tops & Bottoms with the CCI-Indicator in conjunction with the Pivotal Points.
In this trading example there wasn't any Pivotal but ist's also an evening market after London Close (~20h45 GMT+1).
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Forexcube Nov 10, 2011 3:13pm | Post# 7

3 Attachment(s)
EURUSD, M30, 2011 November 10
EURUSD, M1, 2011 November 10

Trade Example - Scalping
Here you could see a trendline at M30. Box "A" described a CCI-Bottom-Area and the green Boxes "C" and "D" a Top-Level-Area of the CCI(14)-Indicator. You could also recognize a "B"/"C"-Divergence where the market price went down afterwards. The CCI didn't show a clear picture at M30 Box "D". It could go further more down or up.

An Entry was made by reason of the M30-Trendline where the price has touched the red ascending resistance line. The Exit was selected at M1 due to the fact of the closed London Market. I wouldn't stay in this trade any longer.
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Forexcube Nov 10, 2011 3:32pm | Post# 8

Using the CCI-Indicator has for me more a dynamical aspect. At first I switch through the timeframes (M1, M5, M15, M30, H1, H4, Daily, Weekly, Monthly) and look after some excellent CCI Pictures. If I have find some few I make up my mind if I want to go in the market (or out of the market). Trading is not to follow any rules in a strict way, it's often to need your experience & tolerance about the fluctuations of the price market which you have consider in your Money Management.
I wish you good Luck!
FXcube

Forexcube Nov 10, 2011 3:35pm | Post# 9

1 Attachment(s)
Actual
Equity: 90.17$
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Forexcube Nov 10, 2011 3:39pm | Post# 10

1 Attachment(s)
Profit
2011 November 11, 20h07 - 21h00, GMT+1

Inadvisable
It is not recommended to trade with 0.5 Lot Sizes at a 90.-$ Account. This could be done more at experienced-trader-level if you like to trade with higher risc here and there. If you do so be aware > accounts could be pulverized!

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Forexcube Nov 10, 2011 7:22pm | Post# 11

3 Attachment(s)
EURUSD, M5, 2011 November 11
EURUSD, M15, 2011 November 11
EURUSD, M30, 2011 November 11

Trade Example
Watching different timeframes could give you good ideas and orientation. The market seems in a range at M15, M30 and it seems good time for M1/M5 Trading (maybe with Stop Losses ~5 Pips above or below the Range Box).
M5 Box "A" signalizing an excellent Short condition for going down. The market price is upside. Box "B" could given also an entry chance, because if you compare the M30 candles together you will become aware that the market price is located above two-thirds length of the candle.
See now #12, please.
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Forexcube Nov 10, 2011 7:23pm | Post# 12

2 Attachment(s)
EURUSD, M1, 2011 November 11, 00:33 GMT+1
EURUSD, M1, 2011 November 11, 00:51 GMT+1

When you have done your short term analyse at the next higher timeframes (#11) you could set your entries and exits at M1-Level (or M5), e.g. when scalping.
When the market seems still and prices are following a range decribed above (#11) a M1 Divergence could give one powerful argument for the market entry (so also for the exits). I don't attach value at M1-Level-Divergences usually.
See now #13, please.
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Forexcube Nov 10, 2011 7:24pm | Post# 13

2 Attachment(s)
Open Orders 00:48 GMT+1
Profit Trades 1.45$

Result from #11 & #12.

Risc Tolerance
If you trade a 90.-$ Account you have manage the risk in a right way. Gathering some pips here and some pips there is one way how you could trade with a low risc rate. 8 Trades have made 1.7% Profit. Not bad! It's not the question if you trade a 10'000.-$ Account or a Billion. You can learn much discipline when doing so.
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igor65 Nov 10, 2011 9:51pm | Post# 14

A good system. But i used level -15 et. Try it!

Rob216 Nov 11, 2011 4:58am | Post# 15

thanks for shared, very interesting

Forexcube Nov 11, 2011 7:43pm | Post# 16

Channel Breakouts With The CCI
Posted: Mar 5, 2008

Often in life, the right action is the hardest to take. The same dynamic occurs in trading. For most traders it is extremely difficult to buy tops and sell bottoms because from a very early age we are conditioned to look for value and buy "cheap" while selling "dear". This is why although most traders proclaim their love for trading with the trend, in reality, the majority love to pick tops or bottoms. While these types of "turn" trades can be very profitable, turn trading can sometimes seem like a Sisyphean task as price trends relentlessly in one direction, constantly stopping out the bottom and top pickers.

Most traders are reluctant to buy breakouts for fear of being the last one to the party before prices reverse with a vengeance. So, how can they learn to trade breakouts confidently and successfully? The "do the right thing" setup is designed to deal with just such a predicament. It tells the trader to buy or sell when most ingrained lessons are against doing so. Furthermore, it puts the trader on the right side of the trend at the times when many other traders are trying to fade the price action. Read on as we cover this strategy and show you some examples of how it can be used.

Do the Right Thing - Trade Breakouts
In the "do the right thing" strategy, the capitulation of top and bottom pickers in the face of a massive buildup of momentum forces a covering of positions, allowing you to exit profitably within a very short period of time after putting on a trade.

"Do the right thing" employs a rarely used indicator in FX called the commodity channel index (CCI), which was invented by Donald Lambert in 1980 and was originally designed to solve engineering problems regarding signals. The primary focus of CCI is to measure the deviation of the price of the currency pair from its statistical average. As such, CCI is an extremely good and sensitive measure of momentum and helps us to optimize only the highest probability entries for our setup. (For background reading, see Timing Trades With The Commodity Channel Index.)

Without resorting to the mathematics of the indicator, please note that CCI is an unbound oscillator with a reading of +100 typically considered to be overbought and any reading of -100 is considered oversold. For our purposes, however, we will use these levels as our trigger points as we put a twist on the traditional interpretation of CCI. We actually look to buy if the currency pair makes a new high above 100 and sell if the currency pair makes a new low below -100. In "do the right thing" we are looking for new peaks or spikes in momentum that are likely to carry the currency pair higher or lower. The thesis behind this setup is that much like a body in motion will remain so until it's slowed by counterforces, new highs or lows in CCI will propel the currency farther in the direction of the move before new prices finally put a halt to the advance or the decline.

Rules for the Long Trade

 

  1. On the daily or the hourly charts, place the CCI indicator with standard input of 20.
  2. Note the very last time the CCI registered a reading of greater than +100 before dropping back below the +100 zone.
  3. Take a measure of the peak CCI reading and record it.
  4. If CCI once again trades above the +100 and if its value exceeds the prior peak reading, go long at market at the close of the candle.
  5. Measure the low of the candle and use it as your stop.
  6. If the position moves in your favor by the amount of your original stop, sell half and move the stop to breakeven.
  7. Take profit on the rest of the trade when the position moves to two times your stop.

Rules for the Short Trade

 

  1. On the daily or the hourly charts, place the CCI indicator with standard input of 20.
  2. Note the very last time the CCI registered a reading of less than -100 before poking above the -100 zone.
  3. Take a measure of the peak CCI reading and record it.
  4. If CCI once again trades below the -100 and if its value exceeds the prior low reading, go short at market at the close of the candle.
  5. Measure the high of the candle and use it as your stop.
  6. If the position moves in your favor by the amount of your original stop, sell half and move the stop on the remainder of the position to breakeven.
  7. Take profit on the rest of the trade when position moves to two times your stop.

CCI Setup On Longer Time Frames
In the daily chart of the EUR/USD pair (Figure 1) we see that the former peak high above the CCI +100 level was recorded on September 5, 2005, when it reached a reading of 130. Not until more than three months later on December 13, 2005, did the CCI produce a value that would exceed this number.

Throughout this time, we can see that EUR/USD was in a severe decline with many false breakouts to the upside that fizzled as soon as they appeared on the chart. On December 13, 2005, however, CCI hit 162.61 and we immediately went long on the close at 1.1945 using the low of the candle at 1.1906 as our stop. Our first target was 100% of our risk, or approximately 40 points. We exited half the position at 1.1985 and the second half of the position at two times our risk at 1.2035. Our total reward-to-risk ratio on this trade was 1.5:1, which means that if we are only 50% accurate, the setup would still have positive expectancy. Note also that we were able to capture our gains in less than 24 hours as the momentum of the move carried our position to profit very quickly.

http://i.investopedia.com/inv/articles/site/FX-CCI1.gif
Figure 1: Do the Right Thing CCI Trade, EUR/USD Source: FXtrekIntellichart

For traders who do not like to wait nearly a quarter of a year between setups, the hourly chart offers far more opportunities for the "do the right thing" setup. It is still infrequent, which is one of the reasons that makes this setup so powerful (the common wisdom in trading is "the rarer the trade, the better the trade"). Nevertheless, it occurs on the hourly charts far more often than on the dailies.

In Figure 2, we look at the hourly chart of the EUR/USD between March 24 and March 28 of 2006. At 1pm on March 24, the EUR/USD reaches a CCI peak of 142.96. Several days later at 4am on March 28, the CCI reading reaches a new high of 184.72. We go long at market on the close of the candle at 1.2063. The low of the candle is 1.2027 and we set our stop there.

The pair consolidates for several hours and then makes a burst to our first target of 1.2103 at 9am on March 28. We move the stop to breakeven to protect our profits and are stopped out a few hours later, banking 40 pips of profit. As the saying goes, half a loaf is better than none, and it is amazing how they can add up to a whole bakery full of profits if we simply take what the market gives us.

http://i.investopedia.com/inv/articles/site/FX-CCI2.gif
Figure 2: Do the Right Thing CCI Trade, EUR/USD Source: FXtrekIntellichart

CCI Setup On Shorter Time Frames
Figure 3 shows a short in the USD/CHF. This example is the opposite of the approach shown above. On October 11, 2004, USD/CHF makes a CCI low of -131.05. A few days later, on October 14, the CCI prints at -133.68. We enter short at market on the close of the candle at 1.2445. Our stop is the high of that candle at 1.2545. Our first exit is hit just two days later at 1.2345. We stay in the trade with the rest of the position and move the stop to breakeven. Our second target is hit on October 19 - no more than five days after we've entered the trade.

The total profit on the trade? 300 points. Our total risk was only 200 points, and we never even experienced any serious drawdown as the momentum pulled prices farther down. The key is high probability, and that is exactly what the "do the right thing" setup provides.

http://i.investopedia.com/inv/articl...e/FX-CCI3x.gif
Figure 3: Do the Right Thing CCI Trade, USD/CHF Source: FXtrekIntellichart

Figure 4 shows another example of a short-term trade, this time to the downside in the EUR/JPY. At 9pm on March 21, 2006, EUR/JPY recorded a reading of -115.19 before recovering above the -100 CCI zone. The "do the right thing" setup triggered almost perfectly five days later, at 8pm on March 26. The CCI value reached a low of -133.68 and we went short on the close of the candle. This was a very large candle on the hourly charts, and we had to risk 74 points as our entry was 140.79 and our stop was at 141.51.

Many traders would have been afraid to enter short at that time, thinking that most of the selling had been done, but we had faith in our strategy and followed the setup. Prices then consolidated a bit and trended lower until 1pm on March 27. Less than 24 hours later we were able to hit our first target, which was a very substantial 74 points. Again we moved our stop to breakeven. The pair proceeded to bottom out and rally, taking us out at breakeven. Although we did not achieve our second target overall, it was a good trade as we banked 74 points without ever really being in a significant drawdown.

http://i.investopedia.com/inv/articles/site/FX-CCI4.gif
Figure 4: Do the Right Thing CCI Trade, EUR/JPY Source: FXtrekIntellichart

When "Do the Right Thing" Does You Wrong
Figure 5 shows how this setup can go wrong and why it is critical to always use stops. The "do the right thing" setup relies on momentum to generate profits. When the momentum fails to materialize, it signals that a turn may be in the making. Here is how it played out on the hourly charts in AUD/USD. We note that CCI makes a near-term peak at 132.58 at 10pm on May 2, 2006. A few days later at 11am on May 4, CCI reaches 149.44 prompting a long entry at .7721. The stop is placed at .7709 and is taken out the very same hour. Notice that instead of rallying higher, the pair reversed rapidly. Furthermore, as the downside move gained speed, prices reached a low of .7675. A trader who did not take the 12-point stop as prescribed by the setup would have learned a very expensive lesson indeed as his losses could have been magnified by a factor of three. Therefore, the key idea to remember with our "do the right thing" setup is - "I am right or I am out!"

http://i.investopedia.com/inv/articles/site/FX-CCI5.gif
Figure 5: Do the Right Thing CCI Trade, AUD/USD Source: FXtrekIntellichart


Conclusion
"Do the right thing" allows traders to trade breakouts confidently and successfully. CCI can put you on the right side of a trade when many others are trying to fade the price action. However, this setup only works if you apply it along with disciplined stops to protect you from major losses if the expected momentum fails to materialize.
by Kathy Lien and Boris Schlossberg

Boris Schlossberg runs BKTraderFX, a forex advisory service and is the senior currency strategist at Forex Capital Markets in New York, one of the largest retail forex market makers in the world. He is a frequent commentator for Bloomberg, Reuters, CNBC and Dow Jones CBS Marketwatch. His book, "Millionaire Traders" (John Wiley and Sons) is available on Amazon.com, where he also hosts a blog on all things trading.

Kathy Lien is an internationally published author and the director of currency research at GFT. Her trading books include: "Day Trading the Currency Market: Technical and Fundamental Strategies to Profit form Market Swings" (2005), "High Probability Trading Setups for the Currency Market" E-Book (2006) and "Millionaire Traders: How Everyday People Are Beating Wall Street at Its Own Game" (2007). Lien also runs an FX Signal Service, BKForex Advisor, with Boris Schlossberg - one of the few investment advisory letters focusing strictly on the 2 trillion/day FX market.


Read more: http://www.investopedia.com/articles...#ixzz1dRnf7jMm


Forexcube Nov 11, 2011 7:48pm | Post# 17

Commodity Channel Index (CCI)

Commodity Channel Index (CCI) is a hugely popular indicator among traders. Although novice traders tend to pay little attention to CCI in the beginning of their lerning curve, later they return to discover amazing potential and beautiful simplicity of the CCI indicator.

There is a variety of CCI indicators, just by looking at the screenshot below with various CCI versions, it becomes understandable - there is huge package of trading methods behind each simple and custom CCI indicator.

http://forex-indicators.net/files/indicators/allcci.png

http://forex-indicators.net/momentum-indicators/cci

Forexcube Nov 11, 2011 7:49pm | Post# 18

CCI download box

http://forex-indicators.net/momentum-indicators/cci

Forexcube Nov 11, 2011 7:53pm | Post# 19

Fundamentals of trading with CCI indicator

Developed by Donald Lambert, original CCI consists of a single line which oscillates between +/-200.
CCI indicator was created to identify bullish and bearish market cycles as well as to define market turning points, market strongest and weakest periods.
Designed for commodities, CCI has quickly found its application in other markets including Forex. The author advises to use CCI for entries and exits once CCI reaches +/-100. It goes as follows:
When CCI moves above +100, there is a strong uptrend confirmed, therefore traders should open a Buy position. The trade is held as long as CCI trades above +100. Exits will be made when CCI goes back below +100. Opposite true for downtrends and readings below -100. Since 1980 when CCI indicator was first introduces, traders have found lots of ways to interpret CCI and expand trading rules. all those methods and views will be cover here.

http://forex-indicators.net/momentum-indicators/cci

Forexcube Nov 11, 2011 7:55pm | Post# 20

CCI and its Zero line

An aggressive way to enter the market is to react to CCI's line crossing its zero level.
When CCI moves above Zero, traders would Buy the currency expecting a newly changed trend to hold. Vice versa, when CCI falls below zero, traders would Sell looking to benefit from early signals of an emerging downtrend.

http://forex-indicators.net/files/in...rs/ccizero.png

Simple rule:
Above zero - Buyers' territory,
below zero - Sellers' territory;
unless, we have reached an oversold/oversold zone.

http://forex-indicators.net/momentum-indicators/cci


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