Description:
Woodies CCI is a technical analysis indicator developed by Ken Woods, building upon the principles of the original Commodity Channel Index (CCI) created by Donald Lambert in 1980. The Woodies CCI is an oscillator that measures a security’s price deviation from its statistical mean, helping traders and investors identify potential trading opportunities and market trends.
Input Parameters:
- Fast: A moving average that reacts quickly to recent price changes, commonly used for short-term trend analysis.
- Slow: A moving average that responds more slowly to price fluctuations, useful for identifying longer-term trends.
Use Case:
- Trend Continuation: Trend Continuation patterns occur when the Woodies CCI remains above or below the zero line for an extended period, indicating a strong uptrend or downtrend. Traders can use this information to determine the market’s direction and identify potential entry or exit points.
- Divergence: Divergence is a pattern where the price of a security and the Woodies CCI move in opposite directions. This can be a bullish or bearish signal, depending on whether the divergence is positive or negative. Positive divergence occurs when the price makes a lower low while the CCI makes a higher low, which can signal a potential trend reversal to the upside. A negative divergence occurs when the price makes a higher high while the CCI makes a lower high, indicating a possible trend reversal to the downside.
This feature can be used in:
- Market Scanner
- Strategy Tester
- Multi-Factor Alerts
- Smart Checklist
Do you want to learn more? Check out our Learning Center Article.