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CCI indicator or call it Commodity Channel Index is a technical analysis tool that was developed by Donald Lambert. This indicator is very popular and was even featured in Commodities magazine in 1980. You can easily find and use the CCI indicator in Pocket Option trading platform.
How to insert Commodity Channel Index indicator on Pocket Option?
In order, to add Commodity Channel Index indicator on the Pocket Option chart follow the steps given below.
Step 2: Once, you have logged in click on the indicator button.
Step 3: Search and select the CCI indicator from the list.
Step 4: Configure the indicator as per your requirements and increase the width or change the colour of the indicator line.
Unfolding CCI indicator
When you open the CCI indicator on the Pocket option trading platform. you will find the three most important components i.e moving average line or the baseline that uses 20 periods. Next, the -100 line and +100 line.
The -100 line helps traders to identify the oversold level or upcoming bullish trend. Similarly, the +100 line helps traders to identify the overbought level or upcoming bearish trend. The baseline or moving average line oscillates around the two lines and it helps to identify the trends and reversals.
Key Points about CCI indicator
- CCI indicator is a technical indicator that measures the difference between a security price change and the average price change.
- The indicator oscillates between -100 and +100. when the indicator line is below the -100 line it suggests an oversold level similarly, when the indicator line is above + 100 it suggests that the market is at an overbought level.
- This indicator uses a moving average line with a default period of 20. the moving average line oscillates around the overbought and oversold levels. which helps traders to identify upcoming trends and reversals.
Placing trades with CCI Indicator on Pocket Option
There are two ways of trading with the CCI indicator on the Pocket Option. The first one is using the overbought and oversold areas, you can say that the market is at an oversold level when the CCI indicator line is below -100 and here you can consider placing a buy trade.
Conversely, you can say that the market is at an overbought level when the CCI indicator line is above +100 and here, you can consider placing a sell trade.
Trading with Divergence
The second method to trade with the CCI indicator is using the divergence. when the price and the indicator line are moving in the opposite direction it signals the indicator divergence. when you notice the indicator divergence it usually signals a trend reversal and you can place trades accordingly.
So, this is the end of this article. I hope you have found this article helpful. I think I have covered everything about the CCI indicator and now it’s your job to practice the indicator on the Pocket Option demo account. once you start getting good results in the demo account you can shift to the Pocket Option real account and make real money.