CCI contradiction
Any CCI uses here.
The following 2 paragraphs seem to contradict one another with regard
to the 100 levels.
Does anyone use the CCI on an intra-day basis. What have you found to be
the best way of using it.
Lambert's trading guidelines for the CCI focused on movements above +100 and below -100 to generate buy and sell signals. When the CCI moves above +100, it is considered to be entering into a strong uptrend and a buy signal is given. The position should be closed when the CCI moves back below +100. When the CCI moves below -100, it is considered to be in a strong downtrend and a sell signal is given. The position should be closed when the CCI moves back above -100.
Since Lambert's original guidelines, traders have also found the CCI valuable for identifying reversals.
CCI can be used to identify overbought and oversold levels. A security would be deemed oversold when the CCI dips below -100 and overbought when it exceeds +100. From oversold levels, a buy signal might be given when the CCI moves back above -100. From overbought levels, a sell signal might be given when the CCI moved back below +100.
As with most oscillators, divergences can also be applied to increase the robustness of signals. A positive divergence below -100 would increase the robustness of a signal based on a move back above -100. A negative divergence above +100 would increase the robustness of a signal based on a move back below +100.
Trend line breaks can be used to generate signals. Trend lines can be drawn connecting the peaks and troughs. From oversold levels, an advance above -100 and trend line breakout could be considered bullish. From overbought levels, a decline below +100 and a trend line break could be considered bearish.
