CCI Divergence Indicator Trading

CCI indicator is one of the commonly used divergence trading indicator. This indicator is an oscillator similar to the RSI and it can be used to trade divergence setups just the same way as the RSI indicator.

Commodity Channel Index (CCI) Technical Analysis and CCI Forex Trading Signals

The Commodity Channel Index measures the variation of a commodity price from its statistical mean/statistical average.

CCI indicator is an oscillator which oscillates between high levels and low levels

When the CCI is high it shows that price is unusually high compared to the its average.

When the CCI is low it shows that price is unusually low compared to the its average.

CCI Divergence Indicator Trading

CCI Divergence Indicator Trading

CCI Bullish Divergence Setups - CCI Divergence Indicator Forex Trading

Classic CCI Bullish Divergence

CCI classic bullish divergence occurs when price is making lower lows (LL), but the CCI is making higher lows (HL).

Classic Bullish Divergence - CCI Divergence Indicator Trading

CCI classic bullish divergence warns of a possible change in the forex trend from down to up. This is because even though the price went lower the volume of sellers that pushed the price lower was less as illustrated by the CCI indicator. This indicates underlying weakness of the downward trend.

Hidden CCI Bullish Divergence

Forms when price is making a higher low (HL), but the CCI is showing a lower low (LL).

CCI hidden bullish divergence occurs when there is a retracement in an uptrend.

Hidden Bullish Divergence - CCI Divergence Indicator Trading

This setup confirms that a retracement move is complete. This CCI divergence setup indicates underlying strength of an uptrend.

Bearish Divergence - CCI Divergence Indicator Forex Trading

Hidden CCI Bearish Divergence

Forms when price is making a lower high (LH), but the oscillator is showing a higher high (HH).

Hidden bearish divergence occurs when there is a retracement in a downtrend.

Hidden Bearish Divergence - CCI Divergence Indicator Trading

This setup confirms that a retracement move is complete. This divergence indicates underlying strength of a downtrend.

CCI Classic bearish divergence

CCI classic bearish divergence occurs when price is making a higher high (HH), but the CCI is lower high (LH).

Classic Bearish Divergence - CCI Divergence Indicator Trading

CCI Classic bearish divergence warns of a possible change in the forex trend from up to down. This is because even though the price went higher the volume of buyers that pushed the price higher was less as illustrated by the CCI indicator. This indicates underlying weakness of the upward trend.