The Commodity Channel Index (CCI) indicator for MT5 measures overbought and oversold market conditions for any Forex pair and time frame.
It’s called a momentum indicator that delivers the best results when used in agreement with the market trend.
How does the CCI indicator function?
- An oversold market state occurs when the CCI reading reaches -100.
- An overbought market state occurs when the CCI reading reaches 100.
The following indicator inputs and variables can be modified: CCI period (14), line style.
Before implementing the CCI indicator in live trading, familiarize yourself with its workings and conduct thorough testing on a demo account.
Tip: you can combine the CCI indicator with other technical analysis tools to increase the probability of successful Forex trades.
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The picture below shows how the Commodity Channel Index indicator looks like when applied to the MT5 chart.
How To Buy And Sell Forex Pairs With The Commodity Channel Index Indicator?
Find a simple trading example below:
- Buy market condition: it is crucial for the market trend to demonstrate a clear uptrend.
- A buy signal is confirmed when the CCI indicator turns back above -100 from below.
- Open a buy market order and place a stop loss below support.
- Exit the buy position when the CCI indicator reaches the 100 overbought level.
- Sell market condition: it is crucial for the market trend to demonstrate a clear downtrend.
- A sell signal is confirmed when the CCI indicator turns back below 100 from above.
- Open a sell market order and place a stop loss above resistance.
- Exit the sell position when the CCI indicator reaches the -100 oversold level.
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Frequently Asked Questions
How Do I Install This Custom Indicator On Metatrader 5?
- Open the MT5 trading platform
- Click on the File menu button located at the top left part of the platform
- Click on Open Data Folder > MQL5 folder > Indicators
- Copy the cci.mq5 indicator file in the Indicators folder
- Close and restart the trading platform
- You will find the indicator here (Navigator window > Indicators)
- Drag the indicator to the chart to get started with it!
How Do I Edit This Indicator?
- Click in the open chart with your right mouse button
- In the dropdown menu, click on Indicator List
- Select the indicator and click on properties
- Now you can edit the inputs, colors, levels, scale and visualization
- Finally click the OK button to save the new configuration