Weighted CCI Indicator

Weighted CCI Indicator

The Weighted CCI Indicator for MT4 is a trend analysis tool that determines the overbought/ oversold zones of the price.

The Weighted CCI Indicator for MetaTrader 4 is a custom indicator built with the Commodity Channel Index (CCI) trend analyzer. The indicator uses the weighted period, which enables it to be more sensitive and responsive to changes in the market.

What does the CCI indicator tell you?
The CCI indicator is one of the technical indicators that display the overbought and oversold levels of the price. It calculates the average high and low of past prices to determine the extreme zones (overbought/oversold) of the price of any financial asset.

Furthermore, the +100 and -100 zones are by default the overbought and oversold limits for the traditional CCI indicator. However, the Weighted CCI indicator comes with a customized higher overbought and oversold limits (+200 and -200), which makes it suitable to read instruments with higher volatility.

How to trade With the Weighted CCI Indicator for MT4

The above image depicts how the Weighted CCI indicator would look after installation. The red horizontal bars are the overbought and oversold zones, while the dodger blue line is the signal line that delivers buy and sell entry opportunities.

Furthermore, the indicator signals a potential overbought limit when the dodger blue line hits the upper red horizontal line. Similarly, it also suggests that an asset is oversold when the dodger blue line touches the lower red horizontal line.

Therefore, you may open a buy position if the dodger blue line breaks below the red horizontal line and then reversed to the upside. The same principle is also applicable to identify a sell setup (as shown on the image). However, the indicator should be used in tandem with price action/other technical indicators for better efficiency.

Conclusion
The Weighted CCI Indicator for MT4 delivers buy/sell entries using the overbought/oversold limits of the price. However, not all buy/sell signals are valid because the overbought and oversold zones of the price cannot be accurately determined by any indicator. Hence, the indicator is recommended to be used as a confluence with price action/other indicators.