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The LNX CCI indicator is a trading algorithm, the calculations of which are based on the interaction of two moving averages with different types of smoothing and period with the CCI indicator. The LNX CCI indicator is used to determine the presence and direction of the current market trend and its strength, which in turn serves to search the optimal moment to enter the market. The indicator is displayed in the lower window of the price chart in the form of a histogram with a signal line, which, under certain conditions, is painted in a certain color and is located above or below the signal levels, the main of which is level 0.
The LNX CCI indicator is suitable for use on any timeframe, with any currency pair.
Input parameters
The LNX CCI input parameters are quite advanced, and each of them affects its technical operation and the settings of the indicators included in the algorithm. To change the color scheme and general visualization of the indicator, use the Colors section in its settings, while the Levels section is used to add into the signal level indicator window.
- CCI calculation period - value of the period of the CCI indicator. The default value is 14.
- Number of bars determining trend - the number of bars that determine the direction of the current market trend. The default value is 6.
Turbo CCI parameters
- Show turbo CCI - option to use an additional Turbo CCI indicator. Default value is false.
- Turbo CCI calculations period - Turbo CCI indicator calculation period. The default value is 5.
LSMA parameters
- Show LSMA trend - parameter responsible for the presence of LSMA in the indicator window. The default value is true.
- LSMA period - period of the LSMA indicator. The default value is 25.
- LSMA applied price - price type at which the indicator is calculated. Close price by default.
- LSMA drawing position - LSMA indicator drawing position. Default value is 10.
EMA parameters
- Show EMA tend - the presence parameter in the indicator window. The default value is true.
- EMA period - period of the EMA indicator. The default value is 34.
- EMA applied price - type of price to which the moving average calculations are applied. The default is Close price.
- EMA drawing position - exponential moving average drawing position. The default value is -10.
Indicator signals
To open a certain trade using the LNX CCI indicator, the presence, direction and strength of the current trend is determined. To do this, one should take into account the color, direction of the histogram columns and its location relative to the signal levels and the color of the level 0 line. If a strong uptrend is determined, long positions are opened, with a strong downtrend, short positions are opened. In both cases, trades are closed at the moment the current trend changes. Moreover, if a sideways movement is detected in the market, the opening of trades should be suspended until the trend is determined.
Signal for Buy trades:
- Histogram bars are colored with the growth value and together with the signal line rise above the 0 level, the line of which also has the color with the growth value.
Upon receipt of such conditions, a buy trade can be opened on the signal candle due to the presence of a strong uptrend in the current market. The trade should be closed when the color of the histogram and the signal level line changes. At this moment, the current trend is expected to change or end. When the current trend changes, it should be considered opening new trades.
Signal for Sell trades:
- The histogram of the indicator along with the signal level line is colored with the value of the fall and falls below level 0 with the signal line.
A sell trade can be opened immediately upon receipt of such conditions on a signal candle. At this moment, the market determines the presence of a strong downtrend. When the current trend changes or ends, the trade should be closed. That is, it should be considered opening new trades when the trend changes, namely the color of the histogram or the signal level line.
Conclusion
The LNX CCI indicator is very effective, as its calculations are based on the operation of very accurate trading algorithms, which, when interacting with calculations, are able to determine the necessary information about the current trend. The indicator is very easy to use, as it can be seen with preliminary practice on a demo account.
You may also be interested The Directional RSI Trend trading indicator for MT5
