Woodies CCI indicator, also known as CCI indicator, is an interesting technical analysis system. Its author, Mr. Ken Wood, has spent many years perfecting the method and giving generations of traders a great tool to assess the market. Below, Crypto Trading will help you learn more about it as well as how to trade successfully with Woodies CCI.
What is the CCI indicator?
Woodies CCI indicator was created by Professor Ken Wood. It is an indicator built by 2 CCI indicators in 2 different periods. The first is CCI with a period of 14. The second is CCI Turbo with a period of 6. This indicator consists of 3 horizontal lines. Which, there are 2 support and resistance lines, and the middle line is the baseline.
Woodies CCI is quite simple but shows strong trading signals. Traders can use it in coin trading techniques without looking for complex price patterns. You just need to follow the rules that Professor Ken Wood has given. The biggest profit effect from the indicator is to help traders find profits when trading with the price trend.
Rules and objectives of Woodie CCI indicator
Woodies CCI is one of the Crypto Indicators with the most rules. And it can only be used successfully if you know all these rules by heart:
- When applying Woodies CCI, traders should not use any other methods.
- If the trader does not understand the contents of the CCI indicator and is not proficient in it in a Demo account, he should not trade real money.
- If it fails, it is because the trader did not follow the rules, not the indicator itself that gave the following signal.
- The final rule is not to modify any content in the indicator.
The main goal of Ken Wood to create this indicator is to help traders see the whole picture of the market before deciding to enter an order. It provides all the signals for you to trade. Therefore, following the rules and information in the CCI system is especially important.
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Basic content in the Woodies CCI indicator chart system
What is Woodies CCI indicator chart system? It is a chart system that is formed at a specified time based on price momentum. Woodies CCI does not chase prices like other indicators in the market. It is an indicator that helps traders predict prices. By predicting future prices, traders can easily trade with just a few candles.
Not only that, it also helps traders find a safe time to close orders. It also gives signals about bad fluctuations to help traders improve coin trading techniques, limiting ineffective orders.
Understanding the important content in Woodies CCI indicator, traders will have the most effective trading strategy:
Complete CCI indicator pattern
The CCI indicator system is a complete system that does not need editing or additions. Therefore, after opening the indicator on the chart, the trader’s task is to review the signals it brings. Then make an assessment and make a trading decision.
No need to integrate CCI and too many other indicators
When using Woodie CCI, traders do not need to analyze too many indicators. Traders only need to use the Woodies CCI tool. Along with that are some detailed settings that the indicator has prepared. This will eliminate noise signals, helping traders have better confidence when trading.
CCI indicator and time frame should be prioritized
There are many time frames and each time frame will have different price fluctuations. Normally, traders will need to analyze prices in many time frames. However, with the Woodies CCI indicator, you only need to choose 1 time frame and focus on it. Traders will focus on the indicator’s pattern, and not need to care about how the price chart moves. The most ideal time frame to use the indicator is M3, M5.
Two CCI indicators in the Woodies CCI chart system
As mentioned, Woodie’s CCI is formed from two CCI indicators. So in the indicator
In this case, the trader will add 2 CCI 14-period lines and CCI 6-period lines. And so, the indicator will consist of 3 lines with 1 middle line and 2 CCI 14-period lines, CCI6 plays the role of support and resistance.
Trading strategy and risk management in Woodies CCI indicator
Woodies CCI is suitable for Scalping traders. The trader’s job is to wait for the CCI pattern to appear. When the CCI signal is opened, the trader also opens an order. When the CCI gives an exit signal, the trader also quickly exits to ensure safety.
In addition, the useful tool that comes with Woodie CCI is the timer. This tool helps traders know how long it will take for a new CC to form. From there, it will also help traders plan their next coin trading strategy.
Specific CCI indicators
When trading with Woodies CCI, traders only need to care about the CCI indicator with 4 patterns:
- Two Short TLB Patterns
- TLB Long
- Ghost Short
Of which, 2 TLB Short patterns give good entry signals and higher profits than the other 2 patterns. However, all 4 patterns can help traders manage risks effectively. The Woodies CCI system will strictly control risks, helping you trade safely and most effectively.
Using Woodies CCI indicator to determine the trend: Effective coin trading technique
Each market will have different characteristics. Therefore, when trading with the CCI indicator, traders only need to choose a 1-time frame, ie 1 specific market and look at the chart of that market.
In the Woodies CCI system, identifying the right trend and trading with the trend is the most important. Traders will identify the market trend in the following way:
- Look at the middle line, called the 0 line. This line represents the balance of price momentum over that time frame.
- If the CCI indicator is above this 0 line for 6 consecutive candlesticks, the market is in an uptrend.
- If the CCI indicator is below the 0 line for 6 consecutive candles, the market is in a downtrend.
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Evaluate the advantages and disadvantages of Woodies CCI indicator
Advantage:
- Simple interface, easy to operate, applicable to many markets.
- High profits when the market has a clear trend. Investors can easily find the optimal entry point.
Defect:
- If the market has no trend, the Woodies CCI signal will decrease, making it difficult to make correct predictions.
- Signals are only accurate if the trader has the right accompanying coin trading technical analysis tools.
- Counter-trend trading can be risky with Woodies CCI. If you want to trade against the trend, you can learn How to use the stochastic indicator. This indicator will help traders trade both sides of the market more safely.
Conclude
Woodies CCI indicator is a simple, highly effective method but it can be difficult to visualize for new traders. In any case, traders should not put 100% trust in the indicator but need to have their own risk management strategy. Check out other technical analysis tutorials from Crypto Trading and gradually become a seasoned, experienced investor!
FAQs
Under what conditions is Woodie CCI most effective?
The CCI indicator gives particularly accurate signals in clearly trending market conditions.
How to identify trends with Woodies CCI?
Traders rely on the rule of “6 candlesticks” above or below the zero line to determine whether the market is up or down.
Is the zero line fixed?
No, this line is only meaningful in the present and it is always fluctuating to adapt to market changes. Therefore, it cannot be considered as a support resistance level in the future.
