CCI Divergence forex trading system

his is one of the simple trading system available nowadays that can really spin your investment into creating fortune. The system is very simple to use and can easily be adopted by the new forex traders. It will only take you a few days to master how the system works and you will certainly be ready to commence trade on any given market at that particular period and day.

This simple trading system is basically based on the CCI or Commodity Channel Index divergence and it is an indicator which shows you the effective trade divergence patterns on any given market. The system may look complicated at first glance due to the patterns you will have to observe but when you get to understand how the system works you will soon find out that the divergence patterns are entirely observed automatically by the system and all you have to do is decide which trade market would be best for you.

CCI divergence is one of the momentum oscillators indicators. Momentum oscillators react very quickly to short-term changes in price, flipping back and forth between overbought and oversold levels. Oscillators are useful in both ranging and trending currency markets.

There are two types of divergence which are:

1. Regular
2. Hidden

Regular Divergence is often used or understood as a possible trend reversal while hidden Divergence is often used or understood as a possible trend continuation.

Since its introduction, the indicator has grown in popularity and is now a very common tool for traders in identifying cyclical trends not only in commodities, but also equities and currencies. The CCI can be adjusted to the timeframe of the market traded on by changing the averaging period.

The system makes use of trading circles at which it basically focuses on the price whether it makes new highs of falls at a given period of time. Therefore the system uses an indicator to monitor the market prices and you are also able to decide which type of markets you would like to monitor and also set you entry and exit points and also to include setting up your stop losses. To some traders the CCI system may look too complex but this system will definitely give you maximum profits if you are to make use of it and follow the steps closely.

We all know that forex indicators are always lagging but price is king because they are leading indicators. In divergence trading, it's something like price action because you can use it as a leading indicator. You can master this forex strategy after some practicing as practice makes perfect.

When divergence is used properly in forex trading, you can profit from the method consistently too. It is a lower risk to sell near the top and near the bottom of a trend because the risks are relative smaller to the potential reward.

With the CCI system when ever there is a downward trend the system makes new price lows and indicating signals due to the market trend that would have started going out of momentum. Therefore the CCI system would always make divergence patterns indicating a reversal that is taking place.

So when the price is making higher highs and lower lows, we expect the indicators to follow suit. If they are not, then the price and the indicator, in this case the MACD, are diverging from each other and will mean that the forex market may reverse. Again, the method works better on higher timeframe like H4 or higher.

When making use of the CCI system it is strongly advised that you should plot the price chart along with two CCI indicators. Once this has been done you would have to wait and observe the divergence pattern to emerge from both the indicators. It can also be of great use to make use of a single indicator but the use of both indicators gives out the very best signals. There are also other settings that you are able to try out and these will extremely work well for you. The settings are very easy to employ and you should not be worried at all because the system comes with a tutorial and the best part of this system is that you can make use of it using a demo account before you start off investing with your money. The use of indicators is very useful because it will certainly give out strong signals when ever a market starts to run out of momentum and at this point you will be able to decide whether to exit a trade or to set up stop loses.

For example, you can make an excellent set up on the following pair the GBP/USD giving yourself a 15 minute period chart. You will certainly observe that the prices did not trade lower but it will form more like a double bottom formation. If pairs begin to make low prices then the CCI will definitely make new lows indicating a reversal of a positive sign that is taking place and hence this will be correct in this case.

The CCI system is a forex trading system that is very good to use and you do not have to always monitor the events that are taking place. All you have to do is set up your indicators and the system will do the rest for you. Forex market trade can become very easy only is you make use of the right system for your investment and also if you are to include several trading strategies in your system.

Your system will certainly work well if it is combined with several other forex trading strategies and you should also make it a point that you get to understand how other systems work so that you are able to select the very best system for your investment.