Metatrader: MA crossing + CCI
Tuesday, September 21, 2010
, Posted by Usman Ali Minhas at 4:45 AM
When talking about moving average crosses, the possibilities are unlimited. Moving averages are simple trend direction indicators that calculate an average of prices for a specified period, showing the average value of the price of a pair over a set of values. There are also different types of moving averages: simple, exponential, smoothed and linear weighted, each related to how we do the calculation, depending on whether we look at the candle opening, close, low, etc.


Being an average of the last X periods, a moving average could be from 2 to 2000, or even more. Trading with MA crosses, then, has unlimited probabilities, as we can choose 2 or 3 MAs of almost any possible value and setting.
CCI is an indicator designed to identify cyclical turns in commodities (yet they can be applied to a forex cross as well). The assumption behind the indicator is that the pair under study moves in cycles, with highs and lows coming at periodic intervals.
The following strategy has been especially designed for the EUR/USD and for 30-minute charts. It does not give many signals per day, but when it actually does, the results are quite interesting.
Combine two simple moving averages applied to a close. One of the three periods is a price follower, and will just make the system more visual, while the other is of 25 periods. Add a CCI of 50 (fifty periods) with levels at 200 and -200. When the 25 MA cross the 3 periods one and the CCI crosses its mid 0.00 line both in the same direction, either bullish or bearish, and always in the 30 minutes charts, a new candle opening will confirm the beginning of a nice trend in the cross direction.
Test it before applying it, never forget to place a stop loss, and enjoy!