How to use Double- CCI- Woodie

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Trading with Woodies CCI Patterns

This Woodie CCI indicator belongs to the oscillators class, it was created by Donald Lambert in 80s of the last century.

Before reading the article and writing your questions in comments section, I recommend to watch this video. It’s not long, but covers biggest part of questions on the topic.

The creator believed that CCI indicator will help to accurately determine the turning points in the financial markets. Many traders believe this indicator is the only thing which has been working in the financial markets for quite a long time among other technical analysis indicators.

Woodies CCI indicator is a modification of CCI (Commodity Channel Index). The indicator consists of two CCIs with the periods 6 and 14. A fast curve is used in order to predict the slow one’s movement. Besides a histogram for the slow CCI, which, depending on the conditions, is colored in different colors, was added into Woodies CCI.

indicator’s values oscillate near zero line and do not have an upper and lower bound. The high indicator’s value indicates the “overbought” price at the moment, a low value indicates the “oversold” price. The key levels of the Woodies CCI indicator are + -100, + -200 levels and zero line. We’ll talk about Woodies CCI strategy in the next article.

This is How Woodie CCI looks like

Blue line is slow CCI, yellow is fast.

Formulas for Woodies CCI indicator calculation

I didn’t manage to find the correct formulas, so let’s see the principle of CCI calculation in the open-source code in the thinkorswim terminal.

Typical price is The average between high, low, close. Close may be this index, but in the current indicator the author decided to accept such an index for the asset price. Division into three is not important, since the ratio will be calculated at the end.

linDev is the average of the absolute linear deviations of the price from its average over the period = Period.

The red line near the indicator is the absolute linear price deviation from its average with a period = period and the white moving is linDev or just SMA applied to the red chart with a period = period. The next code’s line determines CCI indicator’s value.

When having a value linDev = 0, the indicator’s value is 0, in other cases it is equal to the ratio of absolute deviations of price and linDev multiplied by 0.015. The figure in the denominator is determined by the author in order to have such absolute values of the indicator as they are, this figure doesn’t affect the indicator’s values relativity.

Woodies CCI indicator consists of two CCI (fast and slow) and a slow CCI histogram which changes its colors, as it was previously mentioned. Let’s see the principle the colors are changing by.

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Woodies CCI histogram can have four colors: red, green, gray and yellow. When a slow CCI crosses zero line, the histogram changes its color into gray for 4 bars from the moment of crossing the line. If CCI doesn’t crosses zero line anymore, the 5th bar of the histogram will have yellow color and starting from the sixth and onwards the bars will have red color (CCI below the zero line) or green (CCI above the zero line).

Woodies CCI indicator’s parameters

Indicators have only two parameters:

CCI Period is the period of a slow CCI; TCCI Period is the period of fast CCI; The author recommends the 14 and 6 values for hours timeframe. That’s all. We’ll discuss popular Woodies CCI strategy in the next article.

Double CCI Woodies mt4 indicator

Double CCI Woodies forex mt4 indicator

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DoubleCCI_Woodies is a mt4 (MetaTrader 4) indicator and it can be used with any forex trading systems / strategies for additional confirmation of trading entries or exits.

(downloadable file DoubleCCI_Woodies.rar contains DoubleCCI_Woodies.ex4 & DoubleCCI_Woodies.mq4)

Free Download DoubleCCI_Woodies forex Mt4 Indicator

How to install DoubleCCI_Woodies mt4 indicator in forex trading platform metatrader 4?

How to Trade with Woodies Pivot Points

Woodies pivot points provide a unique approach to calculating key levels of short-term support and resistance and are popular among intraday and day traders alike. Trading Woodies pivot points may be similar to other pivot point variations, however, understanding the subtle differences inherent to Woodies pivot points is key to developing a trading edge.

Read further to learn more about:

  • Definition of Woodies pivot points
  • Calculation method
  • Trading with Woodies pivot points
  • Advantages and Limitations

What are Woodies pivot points?

Woodie’s pivot points are made up of multiple key levels, calculated from past price points, in order to frame trades in a simplistic manner. The key levels include the ‘pivot’ itself, and multiple support and resistance levels (usually up to three each). Traders use these levels as a guide for future price movements when setting up trades.

How to calculate Woodie’s pivot points

The calculation of Woodie’s pivot points may seem complex at first but is actually quite simple. Furthermore, DailyFX has a dedicated pivot points page for Woodie’s, Camarilla and floor-traded pivot points.

The calculation for Woodie’s pivot points differs from other pivots because it places a greater weighting on recent price data than other variations. It is widely believed that the high and low prices are a result of emotions in the heat of the battle, while the opening and closing prices are a more accurate representation of the mood of the market.

The pivot : (Previous high + previous low + 2 x previous close) / 4

Pivot location relative to price Direction bias
Price above pivot Bullish bias
Price below pivot Bearish bias

R1 : (2 x pivot) – previous low

R2 : Pivot + high – low

R3 : High + 2 x (Pivot – low)

S1 : (2 x pivot) – Previous high

S2 : Current pivot – (R1 – S1)

S3 : Low – 2 x (High – pivot)

The calculation of Woodie’s pivot points is also similar to the exponential moving average (EMA) in that it too assigns greater weight to the calculation. This is in stark contrast to the simple moving average (SMA) .

In essence, assigning greater weighting to recent price points makes the indicator more dynamic as it is able to process and display recent information faster.

Trading with Woodies pivot points: Top strategies

Woodies pivot based trading strategies are generally shorter, intraday strategies using smaller forex time frames . As such, traders can use the daily pivot points to frame current price action and observe smaller time frame charts, such as 15-minute charts, for entries, exits and risk management.

Intraday range trading strategy using Woodies p ivot p oints

With shorter time frames, Woodie’s pivots often create zones/ranges where price tends to trade more often than not. Traders looking to take advantage of price moving within a range will look to buy at the bottom of the range and sell at the top of the range.

In the EUR/USD chart below, there are multiple opportunities to enter short or long. For long trades, price bounces off S1 and S2 rather frequently and traders can target the pivot as a take profit level while setting stops at the next lower support level.

Similarly, for short trades, bounces off R1 and the pivot itself can be identified as entry points while targeting S1 and S2. Stops can be placed at R1 or R2 respectively.

However, since price started the day trading below the pivot, it is prudent to keep a short bias unless proven otherwise. So, while traders may take both sides of this range trading opportunity, a higher probability of success can be placed on short trades.

Momentum Breakout Strategy

This strategy aims to latch onto a sharp, sudden move in price using key levels as support and resistance.

The GBP/NZD chart below presents such a scenario, as price breaks out of its usual trading range with increased momentum – confirmed by the green histograms on the MACD indicator.

Price had previously traded below the pivot point until the sharp move up. At this point, traders would be watching if price respects the R1 level as they could eye a short (mean-reversion) trade back down to the pivot.

After price passed through R1 with ease, traders would naturally lean away from any short bias and would start to prepare for a long trade in the event price traded above R2.

A suitable entry would be just above R2 with a conservative stop loss being placed at R1 in the event of a failed move higher. R3 presents a suitable target and ensure a positive risk to reward ratio is achieved.

Advantages and limitations of trading with Woodies pivot points

Woodies pivot points, although based around the classical ‘Floor-Traded Pivot’, have some distinct advantages and limitations. These are tabled below:

Advantages of Woodies p ivot p oints Limitations of Woodies p ivot p oints
Applies greater weighting (importance) on recent price levels May not be ideal for longer-term traders
Beneficial for short-term traders Novice traders may be intimidated by the many formulas and lines on charts
Improves traders risk management

Further reading on pivot points

  • For an in-depth look at pivot points and how to use them in forex trading, read our article on pivot point strategies for forex traders.
  • Whether you prefer Camarilla, Woodie or Classical pivot points, we have you covered with our up to date pivot points page.
  • The central concept around pivot points is that of support and resistance. Learn the ins and outs of this concept through our guide to support and resistance trading.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

Forex Double CCI Woodies Indicator

Forex Double CCI Woodies Indicator

Forex Double CCI Woodies Indicator:

What does Forex Indicator mean?

A forex indicator is a statistical tool that currency traders use to make judgements about the direction of a currency pair’s price action. Forex indicators come in many types, including leading indicators, lagging indicators, confirming indicators and so on. Popular forex indicators include moving averages, relative strength index (RSI) and average true range (ATR). A forex trader must choose the indicators that fit his or her trading strategy.

How to install Forex Double CCI Woodies Indicator?

  • Download Forex Double CCI Woodies Indicator.zip
  • Copy mq4 and ex4 files to your Metatrader Directory / experts / indicators /
  • Copy tpl file (Template) to your Metatrader Directory / templates /
  • Start or restart your Metatrader Client
  • Select Chart and Timeframe where you want to test your forex indicator
  • Load indicator on your chart

How to uninstall Forex Double CCI Woodies Indicator?

To shut down an indicator, one has to remove it from the chart. At that, its drawing and recalculation of its values will stop. To remove an indicator from the chart, one has to execute its context menu commands of “Delete Indicator” or “Delete Indicator Window”, or the chart context menu command of “Indicators List – Delete”.

Download Free Forex Double CCI Woodies Indicator

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