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The CCI Squeeze is a trading algorithm, which is a modification version of the indicator included in the standard forex set. Despite the different visualization and more accurate calculations, the CCI Squeeze indicator has the same goals with its standard version. That is, the indicator makes calculations, thanks to which it is easily the presence or absence of the current trend, its strength is determined, and thus, taking into account these parameters, the optimal moment for entering the market can be found. The indicator is presented in the lower window of the price chart in the form of a histogram, the colors of which will indicate the presence and direction of the current trend, also the period of its strengthening or weakening.
The CCI Squeeze indicator is suitable for use on any timeframe, with any currency pair, as it is effective on any given units.
Input parameters
Unlike the standard CCI, CCI Squeeze has more advanced settings, which consist of five input parameters. Thus, the indicator gives more opportunities to customize it for own convenient trading. In addition, there are sections in its settings that are responsible for its color scheme and adding into its signal levels window.
- CCI Period - CCI indicator period. The default value is 32.
- CCI price - type of price over which the indicator is calculated. Default value is Typical price.
- Average period - value of the moving average period of the indicator. The default value is 200.
- Average method - type of smoothing the value of the moving average of the indicator. The default value is Exponential moving average.
- Average price - the type of price to which the moving average calculations will be applied. Default is Typical Price.
Indicator signals
The CCI Squeeze indicator works and is used on the principle of all histogram indicators, however, it differs from similar ones in greater accuracy in signals. The indicator is presented on the chart as a histogram with a signal line, which, depending on the current conditions, changes its color and location relative to the signal level 0. And it is precisely with these conditions that a trend is determined and a certain trade is opened in its direction. However, it should be borne in mind that if the histogram becomes neutral, then there is no trend at all, and in order to avoid losses at this moment, trades should not be opened.
Signal for Buy trades:
- The histogram of the indicator, as well as its signal line, colored with a growth value, rises above the 0 level.
As soon as, taking into account other conditions, the histogram rises above level 0, a long position may be opened, due to the presence of an uptrend in the market. The position should be closed as soon as at least one bar of the histogram turns into a different color, which will indicate a change in the current trend or the appearance of a sideways movement. In this case, it can be considered opening new positions or simply closing old ones.
Signal for Sell trades:
- The indicator, falling below its signal level, as well as the signal line is colored in color with the value of the fall.
After receiving such conditions, a sell trade may be opened on the signal candle due to the presence of a downtrend. Such a trade should be closed immediately after at least one bar of the histogram turns into a different color. This may indicate a weakening or end of the current trend, or about the appearance of a sideways movement. In case of a trend change, it can be prepared to open new trades, and in the event of a sideways movement, it should be closed the current one and temporarily not open new positions.
Conclusion
The CCI Squeeze indicator is a very accurate and efficient trading assistant, thanks to which it can be easily traded in the direction of the current trend. The indicator generates many signals that are responsible for different indicator values, and in order to quickly adapt to them and learn how to use the indicator correctly, preliminary practice on a demo account is recommended.
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