Unknown by many, there is a private organization based in New york that has the power to influence the us capital markets. This organization, to the best of our knowledge, is not controlled by any government. Yet, their announcements are often watched as closely as the Federal Reserve. Since they are such an influential organization, I like to keep my eye on them, and I would suggest you do the same. The foreign exchange or forex market permits traders to buy and sell currencies and make potential profits from small fluctuations in the rates of exchange. It is an extremely volatile market where money moves from one hand to another very rapidly. In order to make fully informed trading decisions, numerous currency traders count on free forex indicators that robotically analyze price charts and offer a mechanical interpretation of the price changes. The Commodity Channel Index or CCI belongs to the list of these technical indicators. There is no perfect indicator in trading that guarantees success. However, try to boost your experience by learning the fundamentals of the CCI indicator fast.
Use your foreign exchange charting software program and generate a price chart of any currency you seek CCI Small Pistol Primer. Then, implement the CCI indicator on that chart. You will notice a fresh sub-chart emerging underneath your price chart, comprising a solitary line that deviates over and below its zero line at the center as the currency prices deviate.
Try to detect the 100 and -100 levels on the Commodity Channel Index chart. These are located at equal distances from the middle zero line, over and beneath it. A large number of traders find these levels very important in the CCI chart. If your charting program is equipped with a drawing tool, you can clearly mark these levels at the time of your learning so as to make them more apparent.
The private organization I am referring to is called “The Conference Board. ” They were established in 1916 by a group of concerned “business leaders” who represented many of the major industries at the time. This non-profit has been around for more than 90 years, and it is still as influential as ever. To this day, they continue to receive the backing and support of many of the leading businesses in the nation.
The Conference Board is widely known for their research into market economics. They regularly conduct their own research looking at leading economic indicators and, more importantly, the consumer Confidence Index (CCI). The CCI measures short and long term outlooks for the economy and the job market, as perceived by households throughout the US.
About two weeks ago The Conference Board released the CCI numbers for October. The results in a nut-shell were not good, in fact, they were downright horrible. In July the CCI number was over 110 indicating a positive outlook on the economy and the job market. In August the number dropped to around 105, by September it was below 100, and today it sits at just over 95. Lynn Franco, Director of the Conference Board Consumer Research Center had this to say about the recent results. Commodities Channel Index (CCI) is an oscillator that measures the strength of the current market cycle and attempts to predict when it will end. CCI indicator default measurements are +100 to -100. When the indicator is above +100, the market is considered to be overbought and when it is below -100, the market is considered to be oversold.
Commodities Channel Index breakouts occur when it falls below +100 or rises above -100. Most traders are taught to buy when the breakout from the oversold market takes place and sell when the breakout from the overbought market condition takes place. In this CCI Breakout Trading Strategy, we will be using a variation of this by combining the Commodities Channel Index Breakouts with our usual support and resistance on the Daily Charts.
Let’s discuss the details of the CCI Breakout Strategy! Suppose, CCI oscillator value rises above -100 or falls below the +100 level. When this happens, it means that the market is coming out of its oversold or overbought condition. This breakout is usually followed by a retracement or a pullback before the market again start continuing in the direction of the breakout. Place an entry order at the open price of the daily candle that appeared on the breakout.