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  • CCI and SMA Studies

    I'm really new to charting and would like to get some samples of the numbers some of the more experienced traders use for the Simple Moving Average and CCI Studies.

    It was suggested in the MA, I should use the 20, 50 and 200 for Length, but I don't know what nos. to start with to plug into the other two fields: Offset & Source.

    Re the CCI, same problem here. It was suggested I use 14 and 21 for Length, but not sure what nos. to plus in for Upper and Lower bands.

    Thanks a lot.

    EAS

  • #2
    EAS
    Moving averages are very subjective and task dependant, so you are probably going to receive as many different suggestions as there are users.
    The 20, 50 and 200 MAs are just some of the more common ones traditionally used with Daily charts.
    Having said that a lot depends on what you are trying to accomplish.
    If you are seeking to determine a trend (irrespective of interval) then my suggestion would be to experiment with MAs that will give you clear signals of inversion and minimize whipsaws.
    If on the other hand you are trying to establish a trading range or a period of congestion then you may want to experiment with bands based either on a percentage of a given value (usually the Close or an average of H+L+C+O or any variation thereof) or channels based on Highs and Lows.
    As to the Offset again this is very subjective. You will find innumerable variations from using a 3 period MA of the Highs and Lows offset by one period, to 6 period channel based on Highs and Lows offset by 4 periods to the old method of offsetting by the square root of the average's length (for example 9/3 or 16/4 etc).
    Each method is valid IMHO when used in the appropriate context and within a rule based system
    As to the Source the traditional averages are based on the Close but depending on the task you may want to use any of the other values.
    As to the CCI bands my suggestion would be to try them initially with the default setting and then - depending on the security and time frame - adjust them so that they give you the best signals.
    HTH
    Alex
    Last edited by ACM; 12-04-2002, 06:28 AM.

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