The Commodity Channel Index Strategy is based on the usage of CCI indicators. Binary options traders consider this tool to be priceless. The CCI has been in existence for over three decades and during that time period it has undergone a number of changes. The CCI indicator that we see utilized today doesnt closely resemble the original. As the name indicates, this popular indicator differentiates between actual asset price trends and distracting noise for commodities trading.

Interpreting CCI Readings

Figuring out the direction of price movement is just as challenging when trading with commodities as with other types of assets. However, an accurate reading of the CCI indicator makes the task quite a bit simpler. The CCI is different from various other indicators because it uses only a single line which oscillates in between values of -/+ 200. A robust price trend comes forth at the halfway point of these valuations.

An upward asset price trend is recognized whenever the indicator goes above +100. A downward price trend is recognized whenever the prices fall below the -100 mark. The range is wide enough to prevent misreads which could be brought on by market noise, allowing binary options traders to clearly see the correct direction.

A complete understanding of the information which is presented by the CCI is going to allow you to make selections without second guessing your every move. The only issue is that not many price trends are going to move solidly past the +/- 100. For that that do, you can expect the unavoidable price reverse to take place soon. What this means is that binary options traders need to take action on these trends rapidly. The best plan is to utilize this indicator in combination with other indicators. In doing so, you should be able to identify an encouraging trend even prior to the CCI giving its confirmation. You can test this strategy at binarydemo.org

Timing Your Trades

Being tardy can be costly when trading binary options. New traders in particular could get so drawn into the analysis process that they miss the boat entirely. When entering the market too late, you increase your risk of losing your investment amount to a reversal. As mentioned above, consider using at least one other indicator which can spot a trend faster than the CCI. Even if the other indicator is not as accurate, you only need it to tip you off, at which point you can turn to the CCI for verification.

The CCI Indicator Strategy provides you with a set time period of opportunity and tells you how long this time period is. Once an underlying asset starts to be overbought or oversold, you know to exit the market. Reading the CCI may require a bit of practice, but once you understand how to process the information it provides, your binary options trend trading efforts are certain to result in more profit.