Pocket Option offers multiple high-quality trading tools and one of them is the commodity channel index. commodity channel index or CCI Indicator is a Momentum-based oscillator that helps us to determine the price movement of an underlying security.
Commodity Channel Index Wiki
Commodity channel index are you can call it CCI indicator is a Momentum-based oscillator developed by Donald Lambert it helps traders to identify the movement of underlying security using the overbought and oversold levels as well as the potential trends and reversals. The CCI indicator is calculated as the difference between the typical price of a commodity and its simple moving average divided by the mean absolute deviation of the typical price plus the index is usually scaled by an inverse factor of 0.015
CCI= 1/0.015 pt- SMA (pt) / Md (pt)
Applying the CCI indicator on the Pocket Option Chart
1> Create a new Pocket Option account: First of all, Create a new Pocket Option account and use our promo code. Just click this link and you will land on the Pocket option home page complete the registration process and make a deposit to claim the bonus.
2> Select asset and time frame: Next, select your desired asset at the top of the page and select the time frame that aligns with your trading strategy.
3> Configure CCI indicator: Lastly, click on the indicator button and search for the CCI indicator in the list next make necessary amendments based on your trading strategy and once you are done click apply.
How to use the CCI Indicator
The CCI indicator is one of the most powerful indicators which can be used for multiple purposes such as identifying trends, divergence and you can even use the indicator for trend confirmation.
Identifying trends: The CCI indicator uses a single moving average line which oscillates around line -300 to 300. CCI indicator reading near – 300 signals an upcoming bullish trend and you can use this opportunity to place a buy trade similarly CCI indicator reading near 300 signals an upcoming bearish trend and you can use this opportunity to place a sell trade.
Divergence: Divergence is a very powerful concept that can be used to find the upcoming reversals when the price and the indicator line are not moving in an equivalent direction it signals an upcoming reversal.
Trend confirmation: Simlarly, when both the price and the indicator line are moving in an equivalent direction it signals the continuation of the trend and you continue with your calls.