CCI Indicator Explained: Better than RSI? // Commodity Channel Index Trading Strategy Chart Meaning


CCI Indicator Explained: Better than RSI? // Commodity Channel Index Trading Strategy Chart Meaning Best Settings Youtube CCI vs RSI stochastic MACD stock forex video pdf beginners day secrets video chart patterns settings john swing daily rsi stochastics macd technical scalping basics how to use simple david moadel welcome to looking at the markets with
David Modell today I wanted to give you an alternative to RSI and it’s called
CCI commodity channel index now don’t be tricked into thinking that it’s just for
commodities people use it for stocks ETFs and commodities as well they use it
for all kinds of things very successfully alright and if you don’t
like RSI or you kind of like it but maybe you don’t like it
here’s something that might actually be better alright let me show you what I
mean and today I’ll be using stockcharts.com and I’ll be using the
daily candlestick chart alright and so I’m thinking like a swing trader here
using the daily chart although all these indicators can be used if you adjust the
time period for a day trading or long term or whatever you like alright so
let’s say you’re in stockcharts.com and you put up your chart for whatever stock
or commodity or ETF whatever you like I did this for Baidu alright you go down
to the bottom and you go to indicators alright and today I’m gonna put up the
RSI at the standard setting for the daily chart which is the 14 period but
I’m also gonna put the CCI alright so you have to look for it it’s in there
alright CCI commodity channel index okay so you
put that on there and the standard setting for that is the 20 period all
right and I like to put them below the chart and you click update
and here you go so this is for Baidu for an example and if you look at Baidu we
can see the problem with RSI on the standard setting okay if you’re looking
for a buy signal a lot of people use the RSI as a buy signal what the what
they’ll do is they’ll wait until it goes below 30 into oversold territory and
then they wait until it comes back up above 30 ok so when it goes below 30 and
then comes back up above 30 out of oversold territory that’s a very common
buy signal alright because not only is it cheap but it’s also coming back up
alright so the momentum is coming back up out of the inexpensive range which is
what I look for okay but the problem with the 14 period RSI is that look at
this you know you’ve got all this chopping going on here lots of perfectly
viable dips here alright when you could have made money and it’s not giving any
buy signals here at no point did it go did it decisively it almost went here
but not quite at no point and this is five months here at no point did it go
below 30 and then decisively back up above 30 and so you you can go literally
for five months and to have lots of chopping and lots of dips you could have
bought it but you’ll be missing out alright and so it can be very boring and
you could leave money on the table well you might want to try as an alternative
to the RSI the CCI commodity channel index not just for commodities it’s for
stocks too and ETFs is it’s very similar as you can see it’s just the numbers are
different for this one if it goes down below negative a hundred here
that is oversold territory and then so it’s the same idea you want to go below
the you know below negative 100 into oversold territory and then back up
decisively back up out of the oversold reason oversold region back up above the
negative 100 line here ok so as you can see you know it almost does it here but
not quite but then it clearly does it here and so you could have had a buy
signal here which is right here and then it just went up and up and up quite
nicely could have made a nice profit there it did it again here went into the
oversold region and then back up clearly ok so you would have bought right around
here and if you had held on you would have done quite well alright and so the
CCI on the standard settings will give you more buy signals in many situations
than the RSI ok it can also give you false signals and
by the way none of these are perfect indicators you cannot rely on them a
hundred percent you need to make your own decision as to when to buy and you
can use more than one indicator alright so here’s another one
this is United Health Group UNH and I put up both the RSI and the CCI
again and as you can see we’ve gone almost half a year in five months
without any buy signals and there are some nice tips here that you could have
bought and here’s a tip here’s a tip here’s a tip all those were viable but
the RSI on the standard setting and yes you can change the setting that’s one
way or you can look at the CCI okay at the twenty period which is the standard
setting and look it told you to buy here because it went into oversold and then
came back up decisively clearly out of oversold and you could have bought here
all right right there and he would have done well okay here it did it again he
could have bought here and held on he would have done well did it again here
and if you had bought here when it came back up out of the oversold region and
held on you would you would have done extremely well all right
give you one more example I decided to do a commodity or at least a commodity
ETF this is IAU which represents gold look at all these
nice dips here okay this works great in choppy markets
alright and let’s take a look at how the RSI did it gave no clear buy signals if
you are using the method that I’m referring to where it has to go below
and then back up above oversold didn’t do it here at all no clear
signals whereas it worked beautifully here you would have you could have
bought here enjoyed a nice run up here made a nice profit it could have bought
here for a nice run up it does have a false signal here okay it didn’t work so
great here you could have bought here and then ya went up a little bit but
then it went down okay so you could have lost money there possibly you could have
gotten stopped out if you had a stop loss
so as we can see it’s not perfect but then over here it worked great went back
you know down here and then back up above and you could have bought here for
a nice run-up so three out of four not bad all right and if you set your stops
correctly and let your winners run then you would have done quite well with this
whereas with the RSI no buy signals according to this method all right so
check out the CCI in addition to or instead of the RSI because it might just
be better and it might be something you never heard of until now and so I’m glad
to help people discover these things all right so if you like this video please
give it a thumbs up on YouTube and please leave comments and please
subscribe to my youtube channel so you can receive the latest updates on my
financial educational videos and if you want some help with technical indicators
or putting together a trading or investing plan because you really need
to have one you can contact me at any time my name is David Modell and my
email address is David Modell at gmail.com thank you so much for watching
and listening I appreciate it very much and I’ll talk to you again soon thank you for watching please like
comment and subscribe and I’ll see you next time

100 thoughts on “CCI Indicator Explained: Better than RSI? // Commodity Channel Index Trading Strategy Chart Meaning”

  1. Isn't fair to say CCI is more of the day trader mentality? If you're a longer term investor and don't deal in the daily/weekly's that CCI and RSI have roughly the same value? Seems like CCI just has a higher sensitivity to the calc. Still a good video, thanks for the lesson.

  2. Thank you for telling about CCI sir, I was really thinking that it is only for commodities hence not tried it till now..

  3. Thank you.. these videos are really informational and you give a very simple and easy to understand explanations. Really helpful.. not sure if I can comment but do not think everyone would prefer the look of girls in that video icons :(.. sorry

  4. The video is looking very good and I want to thank you for sharing it to us. I have been watching for new indicators. Though I am not really fond of technical indicators for trading system yet I will definitely try this indicator in my AAFX’s demo platform for testing. I always do this for using new tools and technique. I think every trader should try this for their trading.

  5. I think if you had added the 50 sma, you'd have found a lot of buy signals with the RSI on 5. Also if you make the trade when the CCI crosses 0 then you'd have avoided the false signals. 😉

  6. Really great stuff. I was just wondering how come with MACD and mostly RSI I was missing many good dips in 5 ,10 , 15 minutes trading.TX a lot I'm switching from RSI to CCI  🙂 but I still stay with Ichimoku clouds

  7. hi there. thanks for this CCI video. you showed where to buy but where will be an ideal place to sell. maybe another video plz. many thanks.

  8. Crypto noob here…

    This allowed me to understand and thus tweak my strategy, was trading CND/BNB at ~2% profit over 12h now it's closer to ~10%.

    This was easy to understand and immensely helpful, I can't thank you enough…I subbed.

  9. Wow, this is smth completely new to me! I am already actively using MACD and Bollinger Bands ( thanks to you Dave for the great videos on them!) Yes, I also find RSI can be quite week/slow sometimes and not much help. Just set up CCI on my charts few minutes ago, will try it out as an additionl tool next week. Thank you again!

  10. David Videos are just pure simple, Non-technical and awesome, with clear examples. Will come back to check out more ..

  11. Hey David – I have to give you some credit. I have to admit that I like your models in your video snips – got me to watch your video. A bit dissapointed that they are not included more. Ha Ha. Well done.

  12. I like pairing CCI with RSI, a bounce off the 30 RSI line and the CCI showing overbought is the perfect place to long, works for me. Also, the CCI has worked better for me to indicate divergences. Sometimes the CCI will show a bullish/bearish div and the RSI will not, which could be costly.

  13. Change both indicators to 9 days and they become better signals, especially when combined with CMF at 9, EMA's of 20 and 50 and MACD of 12, 26, 9 days.

  14. Well presented David, I am now a subscriber. If I am using an RSI period 2, what would you recommend my setting be on the CCI? Thank you very much.

  15. honestly you the best one who explain indicators and TA with a simple way .

    one quation please we have to akways keep the standard setting of cci at 20 or we can change it to 10 if we are in a day trading .

  16. Good morning from Jakarta Indonesia. You are a very good teachee sir. To the point and very clear. I love you sir. Bless you ❤️❤️👍👍👏👏

  17. David. Thanks . One quick question. Are you using the standard CCI (20) or over the years you managed to fine tuned it to get better trades ?

  18. Your channel is phenomenal. I hate how other channels drag the info out to a trickle so they can make more videos with less learning.

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