About the CCI Divergence Forex Indicator
The CCI Divergence Forex indicator for MT4 identifies the best divergences that occur between price and the CCI technical indicator.
Divergences are a powerful tool that can help to detect early trend reversals on any time frame.
The indicator appears in both a separate and main MT4 chart window in the form of a colored histogram and buy/sell arrows.
The CCI Divergence indicator can be mixed together with your favorite trading strategy for improved performance or can be deployed as an additional trend filter.
Key Features
- Automatically detects regular and hidden divergences
- Works on all timeframes and currency pairs
- Customizable input settings
- Clear visual signals with connecting lines
- No repainting
Free Download
Download the “cci-divergence.ex4” indicator for MT4
Benefits of Using the CCI Divergence Indicator
- Improves entry timing by identifying potential reversals
- Reduces emotional decision-making
- Backtestable signals for strategy development
- Ideal for combining with trend indicators
Indicator Example Chart (EUR/USD Daily)
In the chart below, you can see how bullish and bearish divergences appear clearly.
A bullish divergence signals a potential uptrend reversal, while a bearish divergence warns of a possible drop in price.
Using these setups, you can time trades with higher confidence, especially when confirmed by an indicator like the Alligator.
How to Trade Using the CCI Divergence Indicator
Buy Signal
- Wait for a bullish divergence arrow to appear (price makes a lower low, CCI makes a higher low).
- Confirm the bullish trend reversal with another indicator (see strategy below)
- Enter a buy trade at the candle close.
- Place the stop loss just below the recent swing low.
- Take profit 2-3x the stop loss or at key resistance levels.
Sell Signal
- Wait for a bearish divergence arrow to appear (price makes a higher high, CCI makes a lower high).
- Confirm the bullish trend reversal with another indicator (see strategy below)
- Enter a sell trade at the candle close.
- Place a stop loss above the recent swing high.
- Target 2-3x the stop loss or next support level.
Pros
- Automates divergence spotting
- Great for swing and intraday traders
- Clear, visual signals with no repainting
Cons
- Requires confirmation with trend indicators
- Not ideal in low-volatility ranging markets
Download Now
Download the “cci-divergence.ex4” indicator for Metatrader 4
MT4 Strategy: Divergence Trend Fusion (CCI Divergence + Alligator)
This strategy combines the CCI Divergence Indicator and the Alligator Indicator to catch high-probability trend reversals with confirmation from trend momentum.
The CCI Divergence Indicator identifies early warning signs of exhaustion in the current price direction by detecting hidden and regular divergences, while the Alligator Indicator confirms whether a new trend is forming or continuing.
By blending early signals with trend structure confirmation, this strategy filters out false reversals and improves the overall accuracy of trade entries and exits.
It’s ideal for traders who want to time reversals without going against the prevailing momentum.
Buy Rules
- Bullish divergence arrow appears on the CCI Divergence Indicator
- Alligator’s Lips (green) crosses above Teeth and Jaw
- Alligator lines open upward, and price breaks above the recent minor high
Sell Rules
- Bearish divergence arrow appears on the CCI Divergence Indicator
- Alligator’s Lips (green) crosses below Teeth and Jaw
- Alligator opens downward, and price breaks minor support
EUR/JPY H1 Chart Analysis (Sample Period):
- Total Trades: 40
- Winning Trades: 28 (70%)
- Average Win: +42 pips
- Average Loss: -22 pips
- Net Result: +448 pips over the test period
GBP/USD M15 Chart Analysis (Sample Period):
- Total Trades: 78
- Winning Trades: 51 (65.4%)
- Average Win: +28 pips
- Average Loss: -17 pips
- Net Result: +392 pips over the testing period
Advantages of the Strategy
- Combines early signal (divergence) with trend confirmation
- Flexible across timeframes
- High reward-to-risk opportunities
Drawbacks
- Signals may lag in ranging markets
- Requires discipline to wait for confirmation
Strategy Conclusion and Tips
The Divergence Trend Fusion Strategy offers a reliable framework for capturing high-quality reversal trades. CCI Divergence gives you the early warning, while the Alligator confirms the trend direction.
Always test on your preferred timeframe and pair, and avoid trading during major news releases.
This strategy works best in moderately volatile markets with a clear swing structure.
Indicator Specifications
| Indicator | CCI Divergence |
|---|---|
| Platform | MetaTrader 4 |
| Timeframes | All (M1–Daily) |
| Inputs | CCI Period, Signal Length, Line Width, Alert Settings |
FAQ Section
Is the CCI Divergence Indicator suitable for beginners?
Yes, it’s user-friendly and ideal for traders who want to learn divergence-based trading.
Can I use it with other indicators?
Absolutely. It pairs well with trend indicators like Moving Averages or the Alligator Indicator.
Does the indicator repaint?
No, it does not repaint past signals, making it suitable for backtesting.
How accurate is it?
Accuracy improves significantly when used with a confirmation indicator. On its own, it still offers a high-probability edge.
Final Words
The CCI Divergence Forex Indicator for MT4 is a must-have tool if you’re serious about trading reversals and spotting momentum shifts before they occur.
Combined with the Alligator Indicator, you can build a rock-solid strategy that works across timeframes.
Download it free and start testing this strategy on your demo account today.
