Double CCI or more widely known as double woodies CC1 use two overlapping CCI indicators. CCI known as Commodity Channel Index measures the deviation of the commodity price from the average statistical price. High values of the Index point out that the price is unusually high being compared with the average one, and low values show the price is too low. In spite of its name, the CCI can be applied for any financial instrument.
The original settings for the Double CCI as set by Ken Wood was CCI 6 and CCI 14. Modification of the system By Canadian Dude as disclosed at Forex factory Forum used 34/170 seting. Included in the system were the HAS candles and an RSI setting of 14. A valid trade required the CCI 170 to cross zero line before the CCI 34 on the 1 min chart, with the CCI 170 in both the 1min and 5min chart either above or below zero. Once the CCI 34 crossed in the direction of the CCI 170, you also need and RSI above 55 or below 45.
Contributors at The Forex Factory Forum modified the system that finally it become two moving average cross over with a filter incorporating double CCI and RSI.
Later contributors like F4mnect, Canuck CT, Kinonen, John Edwards,fxtrading24 changes the setting further from 34/170 to 21/89 plus 30 period sma. My preferance after one month testing is using duble CCI with 21/89 setting with a 30 period sma overlay on the double CCI. I adopted a simple approached with the main criteria of crossover of CCI 21 over 30 sma. A positive cross i.e buy signal is referred to the crossover of sma 30 by CCI from below while a crossover of 30 sma from above by CCI 21 is reffered to as negative cross. CCI 89 confirm the trend, above zero is uptrend below zero is downtrend. Loosely I will refer to the trade rules for Double CCI as laid down by Ken Wood. I don't prescribe of all his rules or methods.
Let run through the simple trade rule based on the chart below:
At 6:34, CCI 29(the orange color line) cross the 30 sma(black color line) from below, a positive Double CCI cross or a buy signal
At 6:59 CCI 29 cross the 30 sma from above, a negative Double CCI cross or a sell signal.
