Zero Line Cross Charts
Tuesday April 17, 2007
As requested, here are some more charts of the zero line cross trading system, this time on the DAX futures market (click on the charts to view them in full size) :
The entry bars (the bars where the 50 CCI crosses the zero line) are shown in white with blue arrows, and the direction and entry price of each trade are written on the chart.
Notes :
- On the third chart, the zero line cross marked as "No Entry" is not a valid entry because the low of the entry bar was never broken.
- Also on the third chart, the long entry went from 7318.5 to 7388.0 before any exit signals occured, which was a potential profit of 139 ticks (1737.50 EUR) in 2 hours and 20 minutes, and only needed a 4 tick stop loss.
- On the fourth chart, the exit signal marked as "Possible Exit" was because the 50 CCI crossed back below the zero line. This was not a reversal signal, because the 25 CCI was still above the zero line.
Comments
Hello Adam,
Quite an exceptional body of work you’ve created online.
I have 1 question re 1 part of it…
You state the following:
“Add the CCI, and an Exponential Moving Average Add a 50 bar CCI, a 25 bar CCI, and a 34 bar exponential moving average of the HLC typical price (calculated as (High + Low + Close) / 3)).”
I understand the 34 EMA is calculated via the AvgHLC.
My question is:
Is the 50 Bar CCI and the 25 Bar CCI also calc’ed via the AvgHLC (the default on my chart service for CCI is “Close”) ?
Thanks much for your time, Adam,
In answer to your question :
The 50 CCI and the 25 CCI are both calculated using the HLC average (calculated as (High + Low + Close) / 3), but this can be adjusted if necessary for different markets.
The default for the CCI on most charting software is the Close, but I prefer the HLC average, because it represents the entire bar, not just the last trade of the bar.
Thank you for your comment.