Market Savvy for Trading CCI

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Darleen Watts
5 years ago
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1 Slide 1 Market Savvy for Trading CCI - Timeframe selection through money management - Selecting one time frame - Recognizing trending or consolidating markets - Recognizing entry points and exits during trends - Recognizing when to sit on hands - What happened before what happened happened?

2 Slide 2 Achieve these skills on 5 min chart before considering a faster timeframe Recognize market characteristics - recognize trending mkts, sideways mkts, divergence using CCI - understand reward/risk ratio of trend vs countertrend trades - be able to draw price chart with ema & lsma from cci chart CCI pattern recognition - know trigger for pattern - know nuances for pattern for higher probability trade - know what usually happens when what happened before happens - recognize which exits are appropriate for which circumstances Money Management - best not to risk > 1% of capital on a trade - learn to keep stats on each trade, entry, stop, exit, MFE, MAE - learn to use stats to understand trading in probabilities - learn to trade probabilities and relax - execution skills on one pattern, entry, stop, exit Use MM Calculator to direct trading study - what is risk, reward, win % on one pattern (zlr) - how much profit can you pocket with that set of stats? - understand how this tells you what you need to change Psychology of Successful Trader - conquer early exits, big losses,overtrading, hesitation, going from paper to real money - conquer fears of failure, loss, criticism, calamity, gambling, - develop conviction of no bias, develop belief in CCI and in self as trader

3 Slide 3 Selecting Your Timeframe Trades must fit money management objectives and constraints. Use Woodie s calculator Signals must offer > 2 reward: 1 risk ratio Stop size must be less than half of expected win size Win% and risk multiples expected must match trader s ability For the timeframes under consideration, 1. Determine the frequency of the pattern(s) you plan to trade. How many per week? 2. Determine the yields and stops for each pattern. Decide which timeframe s patterns and yield per pattern are within your current trading ability Become an accomplished CCI trader using a timeframe recommended by Woodie before you use a faster timeframe. One of the most common errors is to ignore this advice. Trading patterns/frequency should feel right for the individual, but don t be quick to decide. Most traders do not base this decision on logic, money management, or their ability. Instead, they make an uninformed decision based only on thinking that they will make more money with a faster timeframe.

4 Slide 4

nested patterns Try to select a timeframe that shows nested

5 Slide 5 Entry and Re-entry Points in Trends Price patterns Entry_Re-Entry Points in Trends Entry in major valleys Notice nested patterns Try to select a timeframe that shows nested price patterns. That will translate into cleaner CCI patterns for trading

6 Slide 6 Selecting Your Timeframe How many zeroline crosses do you want? 233 tick 10:35 16:00 89 tick 10:35 16:00 Look for 1) tradable patterns and 2) high reward : risk ratio

7 Slide 7 Selecting Your Timeframe 233 tick 10:35 16:00 5 min 10:35 16:00 13 min 10:35 16:00 Slide 8 Recognizing Sideways Market without Prices When has the trend paused or ended? LSMA changes color (early clue) CCI staying within the 100 s CCI crossing zeroline with increased frequency Decreased price movement per given CCI travel EMA angle is reduced or flat Sidewinder says no trend (red) CZI says no trend (multicolored= chop)

9 Slide 9 Recognizing a Trending Market without Prices When has a trend begun? Large or increasing price movement per given CCI travel. A major clue CCI has escaped outside the 100 s, with a HFE CCI crosses the zeroline infrequently (compared to sideways market) Sidewinder green/yellow; CZI blue/red market is trending 34 EMA has good angle (~~30 degrees) CCI, EMA and LSMA agree, all green (L) or all red (S) LSMA does not change color often; price stays on trending side On strong trend days, CCI may remain above the 100 s (long). Traders may even add to positions with MR trades with the trend, at the 100's. Strong traders will stay in a position in strong trends, until CCI goes below 100. On strong trend days, CCI may form ghostlets separated by slingshot ZLR s. Those zlr's are a fine place to add to positions

10 Slide 11 Comparing travel on L vs R side of ghosts

11 Slide 12 Adding to positions in trending markets ZLR s ghostlets

12 Slide 13 Turbo offsets Turbo crossing zl 2 or more bars left of CCI zl cross, warns of sideways market. Offset tends to pull CCI that direction and also warns of possible famir

13 Slide 14 Whale-fluke usually continues across zl Usually signals before price peaks, that a long, tradable corrective move is ahead, with low likelihood of zlr before CCI crosses zeroline.

14 Slide 15 Whale fluke Blue

15 Slide 16 Bart Simpson-haircut-ghost The closer the sawteeth are to extremes the better

16 Slide 17 Which ZLR s would you take?

17 Slide 18 Which ZLR s would you take?

18 Slide 19 Which ZLR s would you take?

19 Slide 10 Sideways consolidation.exaggerated CCI move per tick Trend begins.compressed CCI move per point Sideways Trend 4 Ticks 4 Points

BASIC PATTERNS AND TERMINOLOGY

BASIC PATTERNS AND TERMINOLOGY By James L. O Connell THERE IS RISK OF LOSS IN TRADING FUTURES First I would like to thank Jim O Connell of PFG (Peregrine Financial Group and Peregrine Charities) for reworking