Trade Using CCI Indicator In Binomo

Trade Using Cci Indicator In Binomo
Trade Using Cci Indicator In Binomo

Today we will tell you about the Commodity Channel Index (CCI). These are oversold and overbought zones of the market, which are good signals for trading.
 Let’s see how it is used in trading.

CCI Indicator

An indicator used in technical analysis of financial markets it is called The Commodity Channel Index (CCI). It belongs to the group of oscillating technical indicators. The CCI indicator oscillates between fixed levels from +100 to -100. When the indicator rises above +100 or drops below -100, it signals overbought and oversold conditions.

Binomo CCI Indicator
Binomo CCI Indicator

As we can see in the picture above.

Zone (1): As the price is in an uptrend, the CCI shifts from oversold to overbought zones.

Zone (2): The price is in an uptrend, however, the CCI is in a bearish trend. This is also called CCI divergence.

Zone (3): The price is in a downtrend. The CCI goes from overbought to oversold zones.

How Does CCI Indicator Work?

Use To Identify Trends

When the CCI indicator rises above the overbought zone, the momentum renews. When the indicator starts falling below the overbought zone, the trend will resume. It shows that the bearish trend is getting stronger. The same is true for the bullish trend.

The CCI indicator is used to identify trends on Binomo
The CCI indicator is used to identify trends on Binomo

CCI Divergence

A very good signal for you to use in trading is when CCI is divergent.
CCI divergence is the when the price increases but the CCI momentum indicator goes down or the price decreases but the CCI goes up.
For example, as shown in the picture below: the price increases however the CCI is in a bearish trend. After this signal ended, the price reversed in a bearish direction.

CCI divergence on binomo
CCI divergence on binomo

Trading Strategy Using CCI Indicator

CCI is a market momentum indicator. It gives accurate signals in the medium and long-term. So you also need short-term signals for a perfect strategy. Check out some of the strategies right below.

Requirements: 5-minute Japanese candlestick chart. Enter trade with the expiration time of 10 minutes or above.

Strategy 1: CCI Divergence Combined With Reversal Candlestick Patterns

In this strategy, you need to observe 2 signals. The first one is the CCI divergence. The second is that this divergence ends with a reversal candlestick pattern. Details as follows:

Open UP options = bullish reversal CCI divergence + Bullish Harami.

Binomo CCI divergence combined with bullish reversal candlestick patterns
Binomo CCI divergence combined with bullish reversal candlestick patterns

Open DOWN options = bearish reversal CCI divergence + Evening Star candlestick pattern.

Binomo CCI divergence combined with bearish reversal candlestick patterns
Binomo CCI divergence combined with bearish reversal candlestick patterns

Strategy 2: CCI Combined With Bollinger Bands

Bollinger Bands is a good reversal signal of prices in the short-term. When combined with CCI, the accuracy of trading becomes very high.

Open UP option = the price drops below the lower band of the Bollinger Bands + CCI is in the oversold zone.

Open DOWN option = the price goes above the upper band of the Bollinger Bands + CCI is in the overbought zone.

Binomo CCI combined with Bollinger Bands
Binomo CCI combined with Bollinger Bands

In Conclusion

The CCI – a good indicator for market technical analysis. Follow us for more trading strategies with this indicator. Also, you can experience this indicator directly on a demo account.