CCI Prefiltered Histo is a trading algorithm whose calculations are based on the use of a standard Forex indicator using a special signal filter. Its calculations are aimed at determining the presence of a trend, as well as its current strength and direction. At the same time, taking into account the location of the histogram relative to the signal levels -100 and 100, it is possible to determine whether the market is in the overbought or oversold zone. The indicator is presented in the lower window of the price chart as a histogram with a signal line that changes its color, thickness and direction relative to the signal levels -100.0 and 100. Taking into account the current values of the indicator, information about the current trend is determined, taking into account which a trade can be opened.
The CCI Prefiltered Histo indicator is suitable for trading any currency pair on any timeframe.
The CCI Prefiltered Histo indicator settings consist of several sections. The Input Parameters section is responsible for its technical operation, the Colors section is used to change its visualization values, and the Levels section is used to add signal levels to the indicator window.
-CCIPeriod - calculation period of the CCI indicator. The default value is 14.
-CCIPrice - price type to which CCI indicator calculations are applied. The default value is 5.
-AvgPeriod - indicator calculation smoothing period. The default value is 5.
-AvgMethod - method for smoothing indicator values. The default value is 1.
-OverSold - signal oversold level of the indicator. The default value is -100.
-OverBought - the indicator's overbought level. The default value is 100.
-OverSoldColor - color of the histogram with an oversold value. The default value is LimeGreen.
-OverBoughtColor - the color responsible for overbought in the market. The default value is DarkOrange.
To open a certain trade using the CCI Prefiltered Histo indicator, one should take into account the presence of a trend, as well as its current direction and strength. For this, in turn, the color and directions of the histogram with a signal line, as well as their location relative to the signal levels, are taken into account. If the current market trend is upward, long positions are opened, if the trend is downward, short positions. When the trend weakens or changes, in both cases, trades are closed. At the moment when there is no trend in the market or there is a weak one, trades are not opened at all.
Signal for Buy trades:
- At least three columns of the histogram have a color with a growth value and together with a signal line rise from level 0 to level 100.
Upon receipt of such conditions on a signal candle, a buy trade may be opened, due to the presence of an uptrend. At the moment of its weakening or change, that is, upon receipt of reverse conditions from the indicator, the current trade should be closed and a new one should be considered.
Signal for Sell trades:
- At least three bars of the histogram have a color with a falling value and together with the signal line are located below level 0, reaching level -100.
Upon receipt of a combination of such conditions, a sell trade can be opened on a signal candle. At this moment, a downtrend is determined on the market. The current trade should be closed when the current trend weakens. And consider opening a new one at the moment of its change.
Despite the fact that the CCI Prefiltered Histo indicator is easy to use, it is very effective, since its calculations are based on a modification of a standard Forex indicator, the accuracy of which has been proven over time. Practice on a demo account is recommended before using the indicator on a real deposit.