CCI (5)

by Victor Santana
(Cypress, CA U.S.A.)

SPY Chart

SPY Chart

Looking for an edge? Want to capture profits on short-term swing-trading? Consider using the CCI(5) which is a leading indicator. I've been using this the last 3 years with an average of 80% accuracy rate. This system will remove the confusion when to enter and when to exit. Here is how it works:

1) Trade with the major trend. Find out if the market is in a Bull trend or Bear.
2) Using the CCI(5) on the daily chart, look for setups. In this example we will assume the Market is in a uptrend (Bullish). Look for stocks trading under the -100 zone which is considered your setup.
3) Place a buy-stop order slightly above the high for that day. If the next day the stock trades higher, it will "Trigger" you in on the stock. When you are "triggered" in, place a sell-stop below the last pivot low.
4)Once the CCI(5) reaches above the 100 zone, you will sell half of the position to lock in some profits and move your sell-stop at your entry position. If the stock continue to go higher, simply move your sell-stop to the last day's low.

Don't...
1. Don't Trade against the trend (unless you are a seasoned swing trader)
2. Don't use no more than 10% of your trading account on any one trade.
3. Don't try to second guess where the tops or bottoms are. Let the "shift in momentum" trigger you in.

** If you'll like to see some actual trades with charts, then I invite you to follow me on Twitter. Look for Stock Hunter (red bull icon).

Happy Trading,
-Stock Hunter

Comments for CCI (5)

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Mar 05, 2024
 CC! 5 formula
by: Anonymous

StockHunter,

I would be remiss if I didn't say I enjoyed your post even though I am writing this on 030616.

I am using Telechart and this is the formula for CCI5:

{CCI5} (H+L+C-AVGH5-AVGL5-AVGC5)*1000/3/ (ABS(H+L+C-AVGH5-AVGL5-AVGC5)+ABS(H1+L1+C1-AVGH5-AVGL5-AVGC5)+ABS(H2+L2+C2-AVGH5-AVGL5-AVGC5)+ABS(H3+L3+C3-AVGH5-AVGL5-AVGC5) +ABS(H4+L4+C4-AVGH5-AVGL5-AVGC5)+.001)

JAC
Mar 05, 2024
 Observation
by: Anonymous

I am curious it seems that a buy signal occurs when CCI5 is PLUS 100 with same conditions you proposed.
Also why don't you join StockTwits it's free and you will be exposed to like minded traders.

[email protected]
May 26, 2024
 Commodities Trading
by: fishburn

Hello StockHunter, I enjoyed reading your CCI strategy. In some commodities there is is little or no retracement, can you comment on this please, Have seen your videos, good videos and easy to understand, Thanks fishburn
Jul 19, 2024
 Great approach to trading
by: Stock Hunter

@Anonymous:

Thanks, glad you like the swing-trade strategy.

Using leveraged ETF's help reduce risk compared to individual stocks. This way I am always Bullish, using regular and inverse ETFs. It works for me and my swing-trading style.

I can be reached at [email protected]
Jul 19, 2024
 Shorting
by: Stock Hunter

@Zain:
1) Trade with the major trend. Find out if the market is in a Bull trend or Bear.
2) Using the CCI(5) on the daily chart, look for setups. In this example we will assume the Market and the stock you're looking at is in a downtrend (Bearish). Look for stocks trading over the 100 zone which is considered your SETUP.
3) Place an order to go short slightly below the low for that day. If the next day the stock trades lower, it will "Trigger" you in on the stock to go short. When you are "triggered" in, place a sell-stop below the last pivot high.
4)Once the CCI(5) reaches below the -100 zone, you will sell half of the position to lock in some profits and move your sell-stop at your entry price. If the stock continue to go lower, simply use a trailing sell-stop to the last day or two highs.

Hope that helps you in your trading.

-Stock Hunter
Jul 19, 2024
 Great approach to trading
by: Anonymous

Hi Victor,

Really like your setups and trading style - CCI(5), MACD(5,9,2) and stochastic(5,1) - especially with leveraged ETFs. What's the best way to contact you (searched but couldn't find an email address)?
Jul 02, 2024
 short sell
by: zain

how to enter a short trade?
Jul 02, 2024
 Gaps
by: Stock Hunter

@Anonymous:
Excellent question -- I treat gaps as part of doing business. If it gaps up and goes in your direction, then it is considered a blessing even though you had paid a higher price. But sometimes when it gaps and then pulls back, then that is where having a sell stop at the last pivot low comes in handy. That is why it is to important to first trade with the trend so that the odds are in your favor. Over time, you'll gain confident on your strategy so that gaps become become a welcomed event.

Example:
Looking at FAS daily chart, on Jun. 20th the CCI(5) gave us a setup signal to be ready for a reversal. Then on Jun 25th it gaped up an our entry is higher at 59.48, however since we know FAS was making lower highs and lower lows, we are trading against tend (counter trend trading), so on Jun 26, the CCI(5) is now above 100 range we decide to sell half for a 4.6% near the close, and place a trailing stop at the lows. On Jun 28th, price dip lower than Jun 27th lows, thus selling the remaining position for a 6.4% gain. So on that trade scenario we had three gap-ups all in our favor.

Hope that helps.

-Stock Hunter
Jul 01, 2024
 Gaps
by: Anonymous

Thanks for the great post. How do you handle gaps? Seems like quite a few lately in TNA, FAS, and others.
Jun 29, 2024
 Thank you
by: Kitichai

Dear Stock Hunter

Thank you so much for your kindness
Jun 29, 2024
 Markets
by: Stock Hunter

@Anonymous:
I mainly use it on leveraged ETFs, such as SPXU, TQQQ, TNA, FAS, DZZ, etc. There is so much action on leveraged ETFs, I finding less time for individual stocks. However, it will work on trending stocks as well. For regular stocks, I try to stick to IBD's top 50.

I like to keep it simple.

Hope that helps.
Jun 29, 2024
 Reply
by: Stock Hunter

@Kitichai: Yes, If...
1) You swing-trading (not intra-day trading)
2) Want to look for the best possible entry
3) Identifying a stock with good CCI(5) setup
4) Then drill down to the hourly chart look for a divergence signal on the CCI(8).
5) Place a buy-stop to be "triggered in" if the hourly candle can break above the last candle high.

Hope that helps.
Jun 29, 2024
 markets
by: Anonymous

neat ; do you use it for ETFs only or for trending stocks too ?
Jun 29, 2024
 Does it work with hourly time frame?
by: Kitichai

Does it work with hourly time frame?

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