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Pullback and CCI Indicators

Pull Backs are discussed with Commodity Channel Index (“CCI”) Indicator as supporting tool.

Lets begin with understanding parameters of CCI used here:

CCI: Used with two parameters i.e. Time Frame and Period

Period: It pertains to no of candles in count.

Time: It is measured in minutes, hours, weeks, months, days, yearly.

Let us now understand few commonly used CCI indicators:

CCI 34 30 min: it means the number of candles it considers is 34 and period of each candle is 30 min
CCI 34 5 min: it means that the number of candles it considers is 34 and the period of each candle is 5
min.
CCI 8 5 min: it means that the number of candles it considers is 8 and the period of each candle is 5 min.

Note: We differentiate 5 min period as a Lower Time Frame and 30 min as Higher Time Frame for Intra Day
Trading.

“Notes written below are purely observational and they can be further studied as per few mentioned websites
towards the end.”

Below is an illustration of the above discussed time frames and periods (Fig.1)

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Fig.1

Let us focus more and understand how the aforementioned parameters look like in Multi Frame Time Chart as
shown below in Fig.2

Fig.2

It has three CCI Lines (refer fig.2):

CCI 8 5 min: Yellow

CCI 34 5 min: Blue
CCI 34 30 min: Red

Observe the thin yellow line oscillates the most as it is on Lower Time Frame of 5 min and period 8.

Followed with lesser oscillating CCI 34 5 min and least oscillating CCI 34 30 min. The chart time frame is on 5
min.

Observe the lines above zero of 60, 100,135 and 175 and below zero of -60,-100,135 and -175.

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We classify price movements under following trades:

Momentum Trade
Pullback Trade
Reversal Trade

Momentum Trades

Momentum Trades for which CCI 8 5 min is instrumental We call them Momentum Trades on Intra Day because
apart from CCI 34 30 min>100 condition they also satisfy breakout above day’s Open Range High.

Lets refer to Fig.3 which has CCI 8 5 min chart

Fig.3

It is the one we use to Enter and Exit a trade provided some conditions are true.

General Rule for CCI 8 5 min in Momentum Pullback Trade or that matter many other conditions taken up later
are:

CCI 8 5min Buy/Long if < -135

CCI 8 5min Sell/ Short > 135

This Cardinal Rule is used to Enter a Buy trade when <-135 and Exit or Book Profits when >135 to complete or
close the trade.

Similarly, Enter a Sell trade when >135 and Exit or Book Profits when <-135.

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Pullback Trades are best to add positions to your earlier entry and also called a Pyramiding trades.

In such Pullback and Pyramiding trades the original trend of underlying is highly bullish or bearish.

In ascertain this bullishness and bearishness we move to observe CCI 34 30 min which determines our trade
direction to trade.

If CCI 34 30 min is >100 or just breaks out above 100 it is said to have gathered Bullish Momentum.

The Cardinal Rule that must support the Entry as per CCI 8 5 min is concurrently CCI 34 30 min must be:

Buy/Long if > 110

Sell/Long if <-110

Both collectively, the Conditions for Pullback & Pyramiding Entry are:

Buy/Long if:

CCI 8 5 min < -135 provided CCI 34 30 m >110

Sell/Short if:

CCI 8 5 min>135 provided CCI 34 30 min < -110

Pullback Trades

Pullback Trades for which CCI 8 5 min is equally instrumental as ever.

We call them pure Pullback Trades on Intra Day because they do not need occurrence of Breakout above Days
Open High apart from CCI 34 30 min>100 condition of Momentum.

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Fig. 4

All other conditions and process mentioned before remains same except for the location of Pullback Entry can
be prior to Breakout.

With his we complete Role of CCI 8 5min in Pullback Entries and Pull Back in general and move on in the next
blog post to the Role of CCI 34 5min in Staying in the Trade.

How traders use

CCI?https://www.investopedia.com/articles/active-trading/031914/how-traders-can-utilize-cci-commodity-channe
l-index-trade-stock-trends.asp

Commodity Channel
Indexhttps://stockcharts.com/shttps://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:co
mmodity_channel_index_ccichool/doku.php?id=chart_school:technical_indicators:commodity_channel_index_cci

Multi Time Framehttps://www.mql5.com/en/market/product/15372

Chartilink Screener for Intra Day Buy/Long https://chartink.com/screener/cci-momentum-retracment-buy

Chartlink Screener for Intra Day Sell/Short https://chartink.com/screener/copy-cci-momentum-invest-14

Chartlink Screener for Investment Buy Pullbacks https://chartink.com/screener/copy-cci-momentum-invest-3

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