CCI Gold Trading Analysis and CCI Trading Signals
Developed by Donald Lambert
Commodity Channel Index measures the variation of a commodity xauusd price from its statistical mean(statistical average).
This gold indicator is an oscillator which oscillates between high levels & low levels
When the CCI is high it shows that xauusd price is unusually high when compared to its average.
When the CCI is low it shows that xauusd price is unusually low compared to its average.
Gold Trading Analysis & How to Generate Trading Signals
Overbought/ Oversold Levels
The CCI typically oscillates between ±100.
Indicator values above +100 indicate an overbought conditions and an impending market correction.
Indicator values below -100 indicate an oversold conditions and an impending market correction
Buy Trading Signal
If the Commodity Channel Index indicator is over-sold, levels below -100, then there is a pending market correction.
The over-sold levels will remain intact until Commodity Channel Index indicator starts to move above -100.
When xauusd price starts moving above -100 then that is interpreted as a buy.
The Commodity Channel buy trading signal should be combined with a gold trend-line break signal to confirm the buy.
Buy Trade
Sell XAUUSD Signal
If the Commodity Channel Index is overbought, zones above +100, then there is a pending market correction.
Overbought levels will remain intact until Commodities Channel Index trading indicator starts to move below +100.
When xauusd price starts moving below +100 then that is a interpreted as sell.
This Commodity Channel sell trading signal should be combined with a gold trend-line break signal to confirm the sell.
Sell Trade
Divergence Gold Trading
Bullish XAUUSD Trading Divergence Setup
Bullish divergence forms when price is making new lows while the Commodities Channel Index technical indicator is failing to surpass its previous low.
This is a bullish signal because the divergence will be followed by an upwards market correction.
Bearish XAUUSD Trading Divergence Setup
Bearish Divergence occurs when price is making new highs while the CCI technical indicator is failing to surpass its previous high.
This is a bearish signal because the divergence will be followed by a downward market correction.
Technical Analysis in Gold Trading
