CCI Gold Analysis and CCI Trading Signals
Developed by Donald Lambert
Commodity Channel Index measures the variation of a commodity xauusd gold price from its statistical mean(statistical average).
This indicator is an oscillator trading which oscillates between high levels & low levels
When the CCI is high it portrays that xauusd price is unusually high when compared to the average.
When the CCI is low it portrays that xauusd price is unusually low compared to the average.
XAUUSD Analysis & How to Generate Signals
Over-bought/ Oversold Levels
The CCI typically oscillates between ±100.
Indicator readings above +100 indicate an overbought conditions & an impending market correction.
Indicator readings below -100 indicate an oversold conditions and an impending market correction
Buy Trade Signal
If the CCI indicator is oversold, levels below -100, then there is a pending market correction.
The oversold levels will remain intact until CCI indicator begins to move above -100.
When xauusd gold price begins moving above -100 then that is viewed as a buy.
The Commodity Channel buy signal should be combined with a trend line break signal to confirm the buy.
Buy Trade
Sell Gold Signal
If the CCI is overbought, zones above +100, then there is a pending market correction.
Overbought levels will remain intact until Commodities Channel Index indicator begins to move below +100.
When xauusd gold price begins moving below +100 then that is a interpreted as sell.
This Commodity Channel sell signal should be combined with a trend line break signal to confirm the sell.
Sell Trade
Divergence Trade
Bullish XAUUSD Trade 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 trading setup will be followed by an upward market correction.
Bearish XAUUSD Trade Divergence Setup
Bearish Divergence occurs when price is forming/making new highs while the CCI technical indicator is failing to surpass its previous high.
This is a bearish signal because the divergence trading setup will be followed by a downwards market correction.
Technical Analysis in XAUUSD Trading
Study More Courses and Topics:
- How to Identify a XAUUSD Candlestick
- List of Learn Gold Strategies for Beginners
- How to Trade Ehler Relative Strength Index Trading Indicator Buy FX Signal
- What XAU/USD Patterns Should I Trade with in Gold Day Trading?
- Gold Price Action 1-2-3 XAUUSD Price Action Strategy in Gold
- Day Gold Risk Management and Gold Risk Management Strategies
- Modifying a Trade Take Profit Order on MetaTrader 5 Platform Software
