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HomeForex MT4 IndicatorsCCI Divergence Indicator

CCI Divergence Indicator

Introduction to the CCI Divergence Indicator

The CCI Divergence Indicator is, as the name suggests, a forex trading tool based on Commodity Channel Index that automatically recognizes hidden divergences between price and CCI. Detecting divergence manually is not an easy task. Luckily, the CCI divergence indicator gets the job done automatically, without hassle on the trader side. It provides solid reversal points and great market entry points for forex traders. Therefore, it makes it a great fit for divergence and reversal traders.

The CCI Divergence Indicator fits all kinds of timeframes and currency pairs. It is displayed directly on the main trading chart. The default settings can be modified directly from the input tab. Feel free to experiment with the settings and parameters to fit your personal preferences.

How does it work? How to apply in trading?

Trading Rules Explanation

The CCI Divergence Indicator divergence lines are being displayed on the main trading chart, and CCI bars with buy/sell arrows and being displayed in a separate window below it. That gauge compares the price chart and the pivot value in the CCI. It also connects the tops and bottoms in the chart. A hidden bullish divergence takes place when the price chart shows higher lows, but the oscillator forms lower lows. Conversely, a hidden bearish divergence takes place when higher highs form on the oscillator, but the price makes lower highs.

Buy Signal

Follow these steps for a long trade:

  • CCI Divergence provides an upward arrow
  • Price swings higher from recent low swing
  • Buy trade is triggered after the above conditions are met
  • Set stop loss a few pips below the last low point of the market
  • Take profit or exit trade whenever the CCI Divergence provides opposite arrow or use your own method of trade exit

CCI Divergence Indicator Example of Buy Trade

Sell Signal

Follow these steps for a short trade:

  • CCI Divergence provides an upward arrow
  • Price swings lower from recent high swing
  • Sell trade is triggered after the above conditions are met
  • Set stop loss a few pips above the last high point of the market
  • Take profit or exit trade whenever the CCI Divergence provides opposite arrow or use your own method of trade exit

CCI Divergence Indicator Example of Sell Trade

As always, to achieve good results, remember about proper money management. To be a profitable trader you need to master discipline, emotions, and psychology. It is crucial to know when to trade, but also when not to trade. Avoid trading during unfavorable times and market conditions like low volume/volatility conditions, beyond major sessions, exotic currency pairs, wider spread, etc.

How to set up the CCI Divergence indicator in MT4?

Installation Guide

Download the CCI Divergence.rar archive at the bottom of this post, unpack it, then copy and paste the CCI Divergence.ex4 or CCI Divergence.mq4 indicator files into the MQL4 folder of the Metatrader 4 trading platform.

You can gain access to this folder by clicking the top menu options, which goes as follows:

File > Open Data Folder > MQL4 > Indicators (paste here).

Now go to the left side of your MT4 terminal. In the Navigator find the gauge name, right-click it and select Attach to the chart.

Bottom Line

The CCI Divergences indicator is well worth adding to your trading collection. A good forex indicator will most probably enhance your chance of success. Nonetheless, remember about having realistic expectations. Just like any other technical analysis tool, is not capable of providing accurate signals 100% of the time. Thus, this forex indicator provides false signals occasionally. Its performance will vary significantly depending on market conditions. Feel free to develop your own trading system based around it.

Download Free Forex MT4 CCI Divergence Indicator

To download the CCI Divergence Indicator for Metatrader 4 (MT4) for free just click the button below:

CCI Divergence Indicator Free Download

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