Fibonacci and Commodity Channel Index (CCI) are two indicators which the majority of the traders implement nowadays.
Both indicators are unique, especially when used right while being implemented in such a manner that can enhance consistency and stability to one’s trading activity.
When applying Fibonacci and CCI, it is important to have a strategy in place, as well as the right settings, depending on the time-frame of implementation.
Fibonacci and the 61.8% zone
The first indicator, the Fibonacci, is mainly useful for finding the best possible price in placing a buy and a sell order, particularly at the 61.8% level.
On the other hand, the CCI can be used for identifying breakout zones or opportunities, such bullish or bearish breakouts.
Therefore, assuming that the price has reached the 61.8% Fibo, and the CCI signal line surpassed the 100 zone, then this is an indication that a buy order has higher probabilities of being right.
Alternatively, in the condition where the price is at the 61.8% Fibo, but the CCI signal line is below the -100 area, this is an indication that a sell order has higher chances of being the right move.
Before placing your first order remember the following:
- When the CCI is above 100 and the price is at the 61.8% level Fibo this is a buy signal
- If the CCI is below -100 and the price is at the 61.8% level Fibo this is a sell signal
- The stop loss and the take profit levels could be set at 50 and 50 – 80 respectively
Moreover, always remember that you should trade cautiously at all times.