Stock Chart (CCI indicator)

Stock chart - Day- Pro-Traders
Stock chart 1
Steps for overbought
CCI period 14
1/ is overbought
2/ Price is at a
resistance level on
the
stock charts number
one
3/ Trend line is
broken
4/ Use your tool
As you can see on
the , these
conditions have been
made but the most
important thing to
remember is we are
trading the price, not
the indicator.
Stock chart 2
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1 of 9 18/03/2015 00:14

Double top is a validation of a resistance
level. The price was rejected twice at the
same level. A strong bearish signal after
the validation is a gift. Use your tool to
enter the trade like a pro. If you are
selling, pay attention to the nearest
support level. As the price is falling, it is
seeking a better support level. Manage
the trade carefully and do not allow and a
winning trade, to turn into a losing one.
Notice the first support level (yellow
horizontal line) on the second stock chart
Stock chart 3
Notice on the stock chart number three,
the period 14 is overbought,
but the price is rising. Overbought does
not mean sell. The market can remain
overbought for a long period.
Learn to trade the CCI flawlessly.
CCI is often overbought during the first
and the third Elliott wave. Many traders
do miss the trend because they are
trading indicators instead of trading the
individual financial instrument. To
achieve consistent winning trade, one
must first recognize his or her common
trading mistakes and seek to avoid
them. This is the first step to avoid
losing consistently.
Stock chart 4
2 of 9 18/03/2015 00:14

Notice the ABCD chart on the
stock chart number four. CCI 14 was
oversold the first time at B. Price starts
going up. Watch out for resistance
levels whenever you are buying.
Cautious traders always take profit at
resistance levels if they BUY or they
will move their stop loss to secure their
profit. Do the same. At C, a strong
signal was activated. Price starts going
down for the second time and reaches
D. In theory, AB = CD.
Note that the theory is not always the
reality of the messy market.
Price went down first, with a strong
bearish momentum. Notice that it
stopped at a support level. The BC is a
rally in a downtrend. The downtrend
was not finished and this was confirmed
when the price broke below B.
First white line highlights AB.
Second white indicates CD.
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Stock chart 5
3 of 9 18/03/2015 00:14

Notice the surge in the bullish
momentum as the 14 reaches the
overbought zone on the stock chart
number five. Did you recognize that
sharp peak? It is bullish. Now price
displayed a higher low and turned
around.
This is an invitation to BUY. Smart
traders responded even though the CCI
indicator is already in the overbought
zone. Notice they all respected the
nearest resistance level and took profit.
In an uptrend the price will exhibit
higher lows and higher highs, until it
fails to display a new higher high and
the trend line is broken. The music has
changed. Do check the higher time
frame to confirm the validity of the
resistance level. It is the same story
over and over. Keep your eyes wide
open and be patient.
No rush, stay calm.
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Stock chart 6
4 of 9 18/03/2015 00:14

This is stock 6. Notice how the
price was consolidating but was
displaying higher lows at the same time.
When the price is consolidating, it is
called a balanced market or low
volatility period.
A consolidation that leads to a break
out to the up side or to an uptrend is an
accumulation zone. Smart money was
busy buying during the accumulation
period. On the other hand a distribution
takes place during a consolidation
period that leads to a break down or to
a downtrend. Institution were quietly
selling when the price was oscillating
between two levels. One defined
resistance level and one defined
support level. Do not try to predict the
direction of the trend.
Be patient. The price will first break
above the range but will drop to retest
it. Remember this:
1/ Break....Retest....Turn around
Stock chart 7
5 of 9 18/03/2015 00:14

Markets move in five waves plus abc
corrective waves. Understanding and
mastering the Elliott wave theory is
essential. One can not avoid the
subject of wave principle. This is the
heart beat of the market. Whether, one
is using
or any other indicator, it is crucial to
grasp the Elliott wave theory.
For more about Elliott wave, please
visit www.24elliottwaves.com.
Notice on stock chart 7, the CCI 14
was overbought at the end of the fifth
wave. Notice the bearish divergence.
In theory, the market is considered
overbought at the end of the fifth wave
in an uptrend and oversold at the end of
the fifth wave in a downtrend. One will
always wait for a strong confirmation
before selling or buying. Trading is not
gambling and gambling is not trading.
Wait for a clear cut valid signal without
cutting corners.
Stock chart 8
6 of 9 18/03/2015 00:14

The price does not always trend.
Traders can easily swing trade during
consolidation times. Understanding the
market patterns (not price patterns) will
assist traders in adopting the most
suitable trading strategies.
Oscillators such as , CCI,
give excellent signals in
consolidation periods. Be aware that
the price does not consolidate forever.
It is important to manage the trade
carefully. Always use stop loss and
apply the five per cent money
management rules.
Though, this is a low volatility period, it
is possible to see few volatile days as
the price quickly move from one level to
the next defined level. The movement
between these two levels can be fast
sometimes. The price does not have to
reach the next level. Do not assume
anything. Keep your eyes on the ball
(the price). Do not forget the median
line of the horizontal channel.
Stock chart 9
7 of 9 18/03/2015 00:14

CCI 14 reaches the overbought region
for the first time (notice the yellow
vertical line).
Now draw your horizontal warning line
(white line on the ). Priority is for
buying above the horizontal line and
selling below it.
There is no need to guess it or force
your intention on the price. Just keep
your eyes on it and use your trading
tools (TSTW24, TSTW SYS 08 or
TSTW SYS 008). Note that the price
broke above the line for one day and
retest it the second day. Do not trade
like old fashion traders by jumping into
quick conclusions. However, on the
third day, you want to watch it because
it can fly away. And it did. If you miss
it, do not cry or call your mother. Stay
calm. It came back again to retest it
before going up. As always watch the
resistance levels when you are buying
and pay attention to the support levels
when you are selling. Price can change
direction at these levels. Bank your
profit or move your stop loss to secure
your profit. It is your profit, do not allow
anybody to take it from you.
Trading with charts for absolute returns
Stock chart 10
8 of 9 18/03/2015 00:14

The madness of trading the
indicators is visible on this chart.
Notice the red days. Some traders
were selling instead of buying. If
one wants to sell in an up trend, one
has to day trade carefully.
One does not want to sell in a bullish
zone. The trend line in not broken.
When the is above 100, the
bullish momentum is strong. That is
the theory. A strong bullish
momentum leads to resistances,
trend lines or channels being broken
to the up side. One should also
recall the definition of an uptrend.
Higher lows and higher highs.
SOMETIMES THE PRICE CAN
SUDDEN FALL WITHOUT PRIOR
WARNING.
These are sharp corrections. They
usually take place at major
resistance levels at the end of the
fifth Elliott wave. They are also the
consequence of previous markets'
manipulations and distortions.
Please take time to master Elliott
wave at
www.24elliottwaves.com
Click on the chart to open a CCI page.
9 of 9 18/03/2015 00:14

Stock Chart (CCI indicator)

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