Super Woodies CCI is based on the the standard Commodity Channel Index. The CCI is an indicator which comes pre-installed on metatrader platforms and is an oscillator originally introduced by Donald Lamber in the 80s. It is a typical oscillating indicator where above a certain level it is considered overbought and below, oversold.
Woodie otherwise know as Ken Wood created the Woodies CCI trading system which was very pouplar a few years ago. There was, as there always is, a question of whether his trading room follows actually made any money from his system.
His system was based on trading patterns on the CCI indicator. This could involved drawing trendlines on the peaks and watch for a break up above the line just as you would a price trendline.
There were various patterns to watch out for with noting “hooks” in the indicator from extremes as being key. Further, traders used the number of bars that have been above or below as a signal of trend direction. i.e if the bars had been above the zero line for say 6 bars the trend would be considered to be up.
Naturally when you are trading patterns divergences become very important also. The problem is Woodies CCI trading system has been around for a while now and all the information has been chopped and reprinted etc so with out being part of Woodies trading forum and learning directly for him or other traders that have learnt from him it is hard to know exactly what were his original ideas and what has been added by other traders.
Combing the CCI indicator and Woodie’s CCI trading system resulted in the popular indicator Super Woodies CCI. This indicator is attached to the chart below with the original CCI below it. The main difference is that the indicator colours the trend for you. Green being up and red being down. However it uses the Woodie’s concept of several periods passing before being considered a new trend.
In this indicator it uses 5 bars with the 6th confirming the trend. Displayed on a chart with the XP MA and a LWMA it looks rather good at keeping you on the right side of the trend.
A simple way tp trade this would be to enter long when first green bar appears assuming you have an up-trend arrow from the XP MA indicator and visa versa for a short. You would have to use a trailing stop I think and certainly would have to exit a position if you got a blue bar in the opposite direction. But think you could do a lot worse than this as trend indicator.
And despite CCI indicators originally being for commodity futures there is no reason why you could not use this as a forex indicator.
Free MT4 Download: Super Woodies CCI