OPEN-SOURCE SCRIPT
CCI and MACD Auto Trading Strategy with Risk/Reward
Updated
Overview:
This strategy combines the Commodity Channel Index (CCI) and the Moving Average Convergence Divergence (MACD) indicators to automate trading decisions. It dynamically sets stop-loss and take-profit levels based on recent lows and highs, ensuring a risk/reward ratio of 1:1.5. This script aims to leverage trend and momentum signals while maintaining effective risk management.
Originality and Usefulness:
This script is not just a simple mashup of CCI and MACD indicators; it incorporates dynamic risk management by setting stop-loss and take-profit levels based on recent price action. This approach helps traders to:
・Identify potential trend reversals using the combination of CCI and MACD signals.
・Manage trades effectively by setting realistic stop-loss and take-profit levels based on recent market data.
・Maintain a balanced risk/reward ratio, which is essential for sustainable trading.
Indicators Used:
・CCI (Commodity Channel Index):
・Measures the deviation of the price from its average over a specified period, typically ranging from -100 to +100.
・Helps identify overbought and oversold conditions.
・MACD (Moving Average Convergence Divergence):
・Utilizes the difference between short-term and long-term moving averages to indicate trend strength and direction.
・Provides momentum signals that can be used for timing entries and exits.
How It Works:
Entry Conditions:
Long Entry:
・The MACD histogram is above zero.
・The CCI crosses above the -100 line.
Short Entry:
・The MACD histogram is below zero.
・The CCI crosses below the +100 line.
Exit Conditions:
Long Positions:
・The stop-loss is set at the recent low.
・The take-profit is set at 1.5 times the distance between the entry price and the stop-loss.
Short Positions:
・The stop-loss is set at the recent high.
・The take-profit is set at 1.5 times the distance between the entry price and the stop-loss.
Risk Management:
・The script dynamically adjusts stop-loss and take-profit levels based on recent market data, ensuring that the risk/reward ratio is maintained at 1:1.5.
・This approach helps in managing the risk effectively while aiming for consistent profits.
Strategy Properties:
・Account Size: Configured for a realistic account size suitable for the average trader.
・Commission and Slippage: Includes settings for realistic commission and slippage to reflect real market conditions.
・Risk per Trade: Designed to risk no more than 5-10% of equity per trade, aligning with sustainable trading practices.
・Backtesting Results: Configured to generate a sufficient sample size (ideally more than 100 trades) for reliable backtesting results.
Revised Backtesting Settings
Ensure that your backtesting settings are realistic:
・Account Size: Set a realistic initial capital suitable for the average trader.
・Commission and Slippage: Include realistic commission fees and slippage.
・Risk Management: Ensure that each trade risks no more than 5-10% of the account equity.
・Sufficient Sample Size: Choose a dataset that will generate more than 100 trades to provide a robust sample size.
This strategy combines the Commodity Channel Index (CCI) and the Moving Average Convergence Divergence (MACD) indicators to automate trading decisions. It dynamically sets stop-loss and take-profit levels based on recent lows and highs, ensuring a risk/reward ratio of 1:1.5. This script aims to leverage trend and momentum signals while maintaining effective risk management.
Originality and Usefulness:
This script is not just a simple mashup of CCI and MACD indicators; it incorporates dynamic risk management by setting stop-loss and take-profit levels based on recent price action. This approach helps traders to:
・Identify potential trend reversals using the combination of CCI and MACD signals.
・Manage trades effectively by setting realistic stop-loss and take-profit levels based on recent market data.
・Maintain a balanced risk/reward ratio, which is essential for sustainable trading.
Indicators Used:
・CCI (Commodity Channel Index):
・Measures the deviation of the price from its average over a specified period, typically ranging from -100 to +100.
・Helps identify overbought and oversold conditions.
・MACD (Moving Average Convergence Divergence):
・Utilizes the difference between short-term and long-term moving averages to indicate trend strength and direction.
・Provides momentum signals that can be used for timing entries and exits.
How It Works:
Entry Conditions:
Long Entry:
・The MACD histogram is above zero.
・The CCI crosses above the -100 line.
Short Entry:
・The MACD histogram is below zero.
・The CCI crosses below the +100 line.
Exit Conditions:
Long Positions:
・The stop-loss is set at the recent low.
・The take-profit is set at 1.5 times the distance between the entry price and the stop-loss.
Short Positions:
・The stop-loss is set at the recent high.
・The take-profit is set at 1.5 times the distance between the entry price and the stop-loss.
Risk Management:
・The script dynamically adjusts stop-loss and take-profit levels based on recent market data, ensuring that the risk/reward ratio is maintained at 1:1.5.
・This approach helps in managing the risk effectively while aiming for consistent profits.
Strategy Properties:
・Account Size: Configured for a realistic account size suitable for the average trader.
・Commission and Slippage: Includes settings for realistic commission and slippage to reflect real market conditions.
・Risk per Trade: Designed to risk no more than 5-10% of equity per trade, aligning with sustainable trading practices.
・Backtesting Results: Configured to generate a sufficient sample size (ideally more than 100 trades) for reliable backtesting results.
Revised Backtesting Settings
Ensure that your backtesting settings are realistic:
・Account Size: Set a realistic initial capital suitable for the average trader.
・Commission and Slippage: Include realistic commission fees and slippage.
・Risk Management: Ensure that each trade risks no more than 5-10% of the account equity.
・Sufficient Sample Size: Choose a dataset that will generate more than 100 trades to provide a robust sample size.
Release Notes
Overview:This strategy combines the Commodity Channel Index (CCI) and the Moving Average Convergence Divergence (MACD) indicators to automate trading decisions. It dynamically sets stop-loss and take-profit levels based on recent lows and highs, ensuring a risk/reward ratio of 1:1.5. This script aims to leverage trend and momentum signals while maintaining effective risk management.
Originality and Usefulness:
This script is not just a simple mashup of CCI and MACD indicators; it incorporates dynamic risk management by setting stop-loss and take-profit levels based on recent price action. This approach helps traders to:
・Identify potential trend reversals using the combination of CCI and MACD signals.
・Manage trades effectively by setting realistic stop-loss and take-profit levels based on recent market data.
・Maintain a balanced risk/reward ratio, which is essential for sustainable trading.
Indicators Used:
・CCI (Commodity Channel Index):
・Measures the deviation of the price from its average over a specified period, typically ranging from -100 to +100.
・Helps identify overbought and oversold conditions.
・MACD (Moving Average Convergence Divergence):
・Utilizes the difference between short-term and long-term moving averages to indicate trend strength and direction.
・Provides momentum signals that can be used for timing entries and exits.
How It Works:
Entry Conditions:
Long Entry:
・The MACD histogram is above zero.
・The CCI crosses above the -100 line.
Short Entry:
・The MACD histogram is below zero.
・The CCI crosses below the +100 line.
Exit Conditions:
Long Positions:
・The stop-loss is set at the recent low.
・The take-profit is set at 1.5 times the distance between the entry price and the stop-loss.
Short Positions:
・The stop-loss is set at the recent high.
・The take-profit is set at 1.5 times the distance between the entry price and the stop-loss.
Risk Management:
・The script dynamically adjusts stop-loss and take-profit levels based on recent market data, ensuring that the risk/reward ratio is maintained at 1:1.5.
・This approach helps in managing the risk effectively while aiming for consistent profits.
Strategy Properties:
・Account Size: Configured for a realistic account size suitable for the average trader.
・Commission and Slippage: Includes settings for realistic commission and slippage to reflect real market conditions.
・Risk per Trade: Designed to risk no more than 5-10% of equity per trade, aligning with sustainable trading practices.
・Backtesting Results: Configured to generate a sufficient sample size (ideally more than 100 trades) for reliable backtesting results.
Revised Backtesting Settings
Ensure that your backtesting settings are realistic:
・Account Size: 100万yen
・Commission and Slippage: 0.03銭と1スリッページ
・Risk Management: 証拠金の10％
・Sufficient Sample Size: 190回のバックテストトレード実行
Open-source script
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in publication is governed by House rules. You can favorite it to use it on a chart.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.