Binary Options Trading with CCI Indicator


Binary Options Trading With CCIThe Commodity Channel Index (CCI) was developed by Donald Lambert, an investment analyst, in the late 1970’s. Since then it has been successfully used by lots of brokers and traders with those trading binary options among them. This investment analysis tool is considered to be a good indicator of market trends and greatly helps an investor to find a trade to be worth getting into on the basis of the identified market trend.

CCI is the tool possible to use in order to identify trends across a broad range of markets. Such type of indicators is known as an oscillator as it quantifies the difference of a security asset price from its moving average.

The Commodity Channel Index has a tendency to be abnormally high when an asset price significantly exceeds its average value and fairly low against the backdrop of an asset price to be far below its average value. This investment tool is very useful for a trader when s/he wants to spot assets which seem to be oversold or overbought.

The CCI is also helpful for a trader when s/he tries to identify the valleys and hills in the actual asset value. It also let know that a trend has come to its end or is about to change its direction.

How to use the CCI when identifying a new trend? This usually characterized by movements between levels from -100 and +100 on its plotted chart. If there are any moves outside the range levels either up or down, an asset can be supposed to have a rarely high amount of strength or weakness which can often be followed by a long move of this certain asset. The index shows bullish leaning trend if its value is to the positive side, and a bearish one when its value is on the negative side.

It should be noted that in the case when an investor has a habit to use a zero line and the potential for crossovers exists, the end result can be whipsaws in the chart. And this is the reason why a trader using the CCI index needs to expect the asset to break through +100 level and then long posture for long or wait until it falls below -100 level and then position itself there for the short term In this case the possibility of whipsaw occurrence greatly diminishes.

This index is also useful as the number of time spans a trader wishes to use with it is adjustable to the user’s comfort level. As binary option trading must have an expiration date, the adjustable time frame becomes the core element for the CCI.

More related articles:

 15 Minute Binary Options Strategy
It is not always easy to find a trading style or strategy which works for you. In fact, for most traders the right approach is unique to them simply because everyone has different risk factors. The...
 3 Profitable Ichimoku Strategies Tradinformed
Ichimoku trading strategies are simplified with no grounded analysis or judgement required. It is considered to be a trading pattern designed in Japan. The system has been created to help market pl...
 5 Day Trading Secrets
The day trading market method is basically concerned with short lasting positions, generally, a trader buys and sells stocks simultaneously. The stock options trading strategy implementation instru...
 5 Minute Binary Options Strategy
Learning to trade in binary options is not an easy task. Certainly anyone can start trading, but, to generate consistent profits you will need to understand the principles of this trading and devel...
 60 Second Binary Options Strategy
There are many different options when choosing a 60 second binary options strategy. However, one of the most successful approaches has been to trade in sets of three. This will help you to identify...
 60 Second Binary Options Strategy
One minute is not a lot of time in which to correctly predict the movement of a price! You will barely have completed your trade and it will have expired. In order to use a 60 second binary options...
Binary Option Auto Trading

 

TRADE WHILE YOU SLEEP!

SMART AUTOMATED TRADING SOFTWARE

 

100% Secure