Commodity Channel Index (CCI) is an oscillator which can help traders to identify over-sold and over-bought level.
CCI Divergence indicator gives possible reversal signals when there are discrepancies between CCI and price movement.
Divergence emerges when price and oscillator indicator move in different directions.
For instance, an uptrend Negative Divergence occurs when price reaches a higher high, but the indicator fails to follow. In a downtrend, positive divergence occurs when price reaches a lower low, yet the indicator does not reach a lower low.
For instance, an uptrend Negative Divergence occurs when price reaches a higher high, but the indicator fails to follow. In a downtrend, positive divergence occurs when price reaches a lower low, yet the indicator does not reach a lower low.
For
the most part, oscillator indicators and price trailing each other and
move in the same direction. However, when they start to drift apart, the
current trade may consolidate or exhibit a reverse pattern.
Features:
How to use:
The purpose of divergence indicator is to point when price trend are moving into opposite direction.
Negative divergence:
First of all, we need to locate the recent High1 and its CCI1 value within the given range(lenght1).
Secondly, we find the previous High2 and its CCI2 value within the given range(lenght2).
Then we compare the ratio of these 2 Highs and CCI values to determine if they meet the percentage you set.
For example, if you set "percent=3", then it will check if High1 is greater than High2 by 3%. If you set "CCI percent=5" then it will check if CCI1 is less than CCI2 by 5%.
If both percent conditions are met, there will be a red arrow pointing downward.
Positive divergence:
The indicator will find the recent Low1 and its CCI1 value within the given range(lenght1).
And then it will find the previous Low2 and its CCI2 value within the given range(lenght2).
If you set "percent=1", then it will check if Low1 is less than Low2 by 1%. If you set "CCI percent=5" then it will check if CCI1 is greater than CCI2 by 5%.
If both percent conditions are met, there will be a green arrow pointing upward.
Please note: in order to plot this indicator on both price chart and lower chart, you need to load it in two places. And set CCI_mode to "Upper" in Price chart and CCI_mode to "lower" in Lower chart. As shown in the following picture.
If you want the same signals on both charts, all parameters have to be consistent on both sides.
This indicator works in any time period and applicable for all securities(Stocks, Futures, Forex, Options,ETF, etc.).
When you use this indicator in minute chart, it's better to set "percent" less than 1, otherwise, lots of signals will be filtered.
If you want to add any feature to this indicator, please send us a Customization request.
- Alert: provide both sound and message alert whenever a divergence is found. You can turn it on or off.
- Length 1&2: Define the range of bars which are used to calculate the recent High and previous High, as shown in picture.
- CCI_mode: Choose "Upper" to only plot signal arrows on price chart.
Choose "lower" it will plot as a CCI indicator with divergence signals.
- Percent: The difference between High1 and High2, as shown in picture.
- CCI_Percent: The difference between CCI1 and CCI2, as shown in picture.
- All Parameters of CCI: Adjust the inputs of CCI indicator.
How to use:
The purpose of divergence indicator is to point when price trend are moving into opposite direction.
Negative divergence:
First of all, we need to locate the recent High1 and its CCI1 value within the given range(lenght1).
Secondly, we find the previous High2 and its CCI2 value within the given range(lenght2).
Then we compare the ratio of these 2 Highs and CCI values to determine if they meet the percentage you set.
For example, if you set "percent=3", then it will check if High1 is greater than High2 by 3%. If you set "CCI percent=5" then it will check if CCI1 is less than CCI2 by 5%.
If both percent conditions are met, there will be a red arrow pointing downward.
Positive divergence:
The indicator will find the recent Low1 and its CCI1 value within the given range(lenght1).
And then it will find the previous Low2 and its CCI2 value within the given range(lenght2).
If you set "percent=1", then it will check if Low1 is less than Low2 by 1%. If you set "CCI percent=5" then it will check if CCI1 is greater than CCI2 by 5%.
If both percent conditions are met, there will be a green arrow pointing upward.
Please note: in order to plot this indicator on both price chart and lower chart, you need to load it in two places. And set CCI_mode to "Upper" in Price chart and CCI_mode to "lower" in Lower chart. As shown in the following picture.
If you want the same signals on both charts, all parameters have to be consistent on both sides.
This indicator works in any time period and applicable for all securities(Stocks, Futures, Forex, Options,ETF, etc.).
When you use this indicator in minute chart, it's better to set "percent" less than 1, otherwise, lots of signals will be filtered.
If you want to add any feature to this indicator, please send us a Customization request.
No comments:
Post a Comment