Woodie CCI Trend Forex Day Trading Strategy

0
987
Woodie CCI Trend Forex Day Trading Strategy

Trading on established trends is one of the staple types of strategies that day traders use. In fact, many successful traders who have earned millions day trading use this type of strategy. Some even use trend following strategies exclusively.

The lower timeframes could be trendy at times. However, intraday trends could reverse any time based on intraday cycles. Your best bet would be to trade on established trends that are aligned with higher timeframe trends.

Woodie CCI Trend Forex Day Trading Strategy is a trend following day trading strategy that provides trade signals based on short-term trends on the lower timeframes but are filtered based on a mid-term trend moving average.

Sadukey Indicator

Sadukey indicator is a momentum indicator which identifies short-term trend directions.

It indicates the trend by overlaying bars on the price chart. The bars change colors depending on the direction of the trend. Red bars placed below price candles indicate a bullish trend direction. Blue bars placed above price candles indicate a bearish trend direction.

Super Woodie CCI

The Super Woodie CCI indicator is a trend indicator based on the Commodity Channel Index (CCI).

CCI is basically computed by subtracting a Simple Moving Average (SMA) from the Typical Price. The difference is then adjusted for Mean Deviation. The result are figures that typically fall within the range between +/-100 25% of the time.

Different traders interpret the CCI differently. Momentum and trend traders consider positive figures as an indication of an uptrend and negative figures as an indication of a downtrend. Figures that are beyond +/-100 are considered indications of a strong momentum.

Mean reversal traders on the other hand would consider figures that are overextended far from the midline as an indication of a probable reversal.

The Super Woodie CCI is based on this concept. It indicates trend direction by displaying histogram bars. The bars change colors depending on the direction and strength of the trend. Weak trends are colored blue regardless of whether the bar is positive or negative. Lime bars indicate a bullish trend with momentum and red bars indicate a bearish trend with momentum.

Trading Strategy

This strategy trades on short-term trends based on the Sadukey indicator and are filtered for longer-term trends.

The mid-term trend is based on a 50-period Simple Moving Average (SMA). Trend direction is based on where price is in relation to the 50 SMA as well as the slope of the 50 SMA.

The Super Woodie CCI also indicates the direction of the mid-term trend as well as the strength of the momentum. Trend direction and momentum strength are filtered based on the color of the histogram bars.

Indicators:

  • 50 SMA
  • Sadukey
    • nd: 16
  • SuperWoodieCCI
    • CCI_Period: 55

Preferred Time Frame: 15-minute chart

Currency Pairs: major and minor pairs

Trading Session: Tokyo, London and New York sessions

Buy Trade Setup

Entry

  • Price should be above the 50 SMA.
  • The 50 SMA line should be sloping up indicating a bullish trend direction.
  • The Super Woodie CCI bars should be positive and should be lime indicating a bullish trend with momentum.
  • Wait for price to retrace causing the Sadukey bars to change to color blue temporarily.
  • Enter a buy order as soon as the Sadukey bars change to red indicating the resumption of the bullish trend.

Stop Loss

  • Set the stop loss at the fractal below the entry candle.

Exit

  • Close the trade as soon as price closes below the Sadukey bars.

Woodie CCI Trend Forex Day Trading Strategy

Woodie CCI Trend Forex Day Trading Strategy 2

Sell Trade Setup

Entry

  • Price should be below the 50 SMA.
  • The 50 SMA line should be sloping down indicating a bearish trend direction.
  • The Super Woodie CCI bars should be negative and should be red indicating a bearish trend with momentum.
  • Wait for price to retrace causing the Sadukey bars to change to color red temporarily.
  • Enter a sell order as soon as the Sadukey bars change to blue indicating the resumption of the bearish trend.

Stop Loss

  • Set the stop loss at the fractal above the entry candle.

Exit

  • Close the trade as soon as price closes above the Sadukey bars.

Woodie CCI Trend Forex Day Trading Strategy 3

Woodie CCI Trend Forex Day Trading Strategy 4

Conclusion

This trading strategy is one of the many ways to trade trend following strategies on the lower timeframes.

This strategy tends to produce high probability trade setups if it is aligned with the higher timeframe trends, particularly the 1-hour or 4-hour charts.

It is also best to observe for the intraday cycles of a currency prior to trading the pairs associated with it. For example, if you plan trade GBP and EUR pair on the London open, then it is best to observe for currency pairs associated with GBP and EUR.

Active trade management is also mandatory when trading this type of strategy. This includes moving stop loss to breakeven and trailing the stop loss to protect profits.

Recommended MT4 Brokers

XM Broker

  • Free $50 To Start Trading Instantly! (Withdraw-able Profit)
  • Deposit Bonus up to $5,000
  • Unlimited Loyalty Program
  • Award Winning Forex Broker
  • Additional Exclusive Bonuses Throughout The Year

XM broker

>> Sign Up for XM Broker Account here <<

FBS Broker

  • Trade 100 Bonus: Free $100 to kickstart your trading journey!
  • 100% Deposit Bonus: Double your deposit up to $10,000 and trade with enhanced capital.
  • Leverage up to 1:3000: Maximizing potential profits with one of the highest leverage options available.
  • ‘Best Customer Service Broker Asia’ Award: Recognized excellence in customer support and service.
  • Seasonal Promotions: Enjoy a variety of exclusive bonuses and promotional offers all year round.

fbs broker

>> Sign Up for FBS Broker Account here <<

Click here below to download:

Save

Save



Get Download Access

Get Smarter About Forex Trading Using Indicators

Join 100,000+ subscribers and get our 5 min daily newsletter on what matters in forex.

We do not sell or share your information with anyone.

LEAVE A REPLY

Please enter your comment!
Please enter your name here