ADX and CCI hybrid forex strategy

With this forex strategy we use ADX (Average directional movement index) to find trend and avoid ranging markets. CCI and simple candle signals are added for position entry timing. Strategy can work both in trending and ranging and market and it is able to adapt to both, by using slightly different approach in each market conditions.

 

Used forex indicators

ADX (Average directional movement index) 50. Add 15 horizontal line (Yellow)

D+ (green)

D- (red)

Main ADX (Blue)

 

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CCI (Commodity channel index) 4

Timeframe 1H

 

Forex strategy rules

Main ADX trending above 15 horizontal line – trending conditions

 

D+ line clearly above D- line (uptrend)

CCI above 100 line

Subsequent candle down is closed

We enter long.

 

D+ line clearly below D- line (downtrend)

CCI below - 100 line

Subsequent candle up is closed

We enter short.

 

Position exit

We place our protective stop loss at last swing up in a downtrend, and last swing down in an uptrend. To exit the position in profit we will be looking at D- and D+ line to cross again, or main ADX line to fall below 15 (yellow horizontal line).

With this strategy we can use adding to the winners. To do so it is recommended to move stop loss (all of them) to break even after entering new position. New position should only be opened if new high/low was reached in the trend.

 

Main ADX trending below 15 horizontal line – ranging conditions

 

We will be looking to scalp at both sides of the range.

After CCI rises above 100 we will be looking to sell on first closed bearish candle.

After CCI falls below -100 we will be looking to buy on first closed bullish candle.

Position exit.

We place stop loss couple of pips above the range (Sell orders) and couple of pips below the range (buy orders). We will exit the positon with profit once we get opposing signal at the other side of the range.

 

 

 

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