In my previous article, I have written a brief introductory explanation on Woodies CCI Buy Sell Signal AFL For Amibroker. Today we come with the same subject along with more details on it. We have stated in the previous article that there are various patterns in Woodie CCI. Among them, today we will cover six important patterns with FREE Amibroker AFL Codes link. Before moving to the patterns, let’s have a look at the brief introduction of Woodie CCI.
A famous personality Ken Wood introduced Woodies CCI and the pattern has been named after him. On the name of him, a club has been introduced, Woodies CCI Club. The particular pattern comes under the category of momentum indicator. Let’s start with the basics, what is CCI. Full form of it is Commodity Channel Index. The CCI was first developed in the year 1980 by Donald Lambert. It performs as a versatile indicator. In order to recognize the current market trend (continuation and reversal), the indicator is being used. CCI makes a high move when the price is above its average.
What is meant by Woodie CCI?
As I have stated above that CCI has a real connection with Woodie’s indicator. Mainly, the indicator is based on the trading pattern of the 14 periods commodity channel index. It comes under the unbound oscillator category along with the base value 0. There is no upper limit here. Traders can search for a number of tradable CCI patterns in both the continuation and reversal of the trend. 200 level considers as an extreme reading. With the combination of other signals, the indicator is used often.
Different Types of Woodie CCI Patterns
There are several patterns come under Woodies CCI. Among them, seven of them are described below:
- Hfe (Hook From Extreme)
- Trendline Break
- Zero line reject
- Tony Trade
In order to make the steps easier, an image is given below:
The screenshot is taken from Amibroker software (one of the best charting software tools). You can download it from the given link. Now, come to the main discussion, here the blue bar represents the uptrend position. The red bar represents a downtrend of the market and Grey indicates a reversal of trend. After a series of five grey bars, a trend reversal is confirmed while the yellow bar conforms to trend change.
Now, let’s come to the patterns of Woodies.
Woodie’s Hook from Extreme
The Hook from Extreme trades is formed on +200 or -200 area and then start hooking or reverse back towards zero line. Therefore, the name itself implies the pattern of HFE. It also considers as a counter trade pattern. The pattern formation happens quite fast. Remember one thing when you execute HFE trade, it does not mean you are supposed to stay in it forever, you need to follow the exit signal. However, it can provide you with a huge profit.
This particular pattern connects two high or low. The trade can happen in both countertrades and with the trade. Through peaks and valleys (that line up to across the chart to form a line break), this pattern can be identified. When the line is broken, the trade generates its signal. TLB includes both counter trend and a trend trade.
Vegas is a combination of certain things, firstly it needs to hook from extreme then followed by a rounding of the CCI. This rounding pattern must be consists of a minimum of three bars. The rounding can be formed in any direction. The entire pattern must form on the same side of the zero-line, considers as a strong signal. The rounding part plays a very significant role here, indicates a trend reversal. Vegas forms with around 8 to 12+ bars.
Famir is almost the same as Vegas pattern. The distinction between the two is Famir appears near CCI zero line. The second mountain is a small one, indicates a fast reversal pattern.
Zero line reject
The name of this pattern itself defines its meaning. When CCI approaches or crosses the zero line after that turns back to the previous level, the pattern forms. Traders can combine the ZLR pattern along with Trend Line Break pattern.
The pattern is almost the same as Head and Shoulder pattern and belongs to counter trade pattern. The only difference ghost pattern doesn’t have to cross the neckline. The pattern consists of three peaks.
The pattern begins to form crossing the zero line. The trade of this pattern can be aggressive in nature. Crossing the zero line for four bars minimum being printed. It considers a strong signal.
Besides this, if you are interested, you can go through the link below to get FREE Woodies CCI indicator formula.
Here, we provide a FREE download link of the Woodie CCI indicator formula.
Indrajit is a professional blogger and trading system developer. Amibroker expert, WordPress expert, SEO expert and stock market analyst.Trading since 2002, he has started the journey of StockManiacs.net on 2008. He follows Indian and world stock markets closely.