Those of you who like the CCI but dislike how it lags behind price and are tired of being a day late and a dollar short on your entries and exits may want to take a look at this. The CCI uses (high+low+close)/3 to calculate price. Well I changed that to use the ZeroLagEMA formula that is posted in this forum. I really like the zero lag ema indicator but also like the CCI and the idea of combining them came to me one night as I was going to bed. I also like the work that Gumphrie and I did on the Adaptive CCI and other work we did on another Alternate CCI. Anyway, I combined all these into one indicator called the ZeroLagEMA_CCI and am including it here for you all to take a look at.
By the way, the adaptive cci had a problem coloring the histgrams correctly. That problem is corrected in this indicator.
The indicator uses the adaptive CCI code so you have a variable period that is based on John Ehlers work. Same code as you saw in the Adaptive CCI Gumphrie and I posted some time ago. That indicator also plotted 4 additional CCIs that calculated price in a way that weighted those plots to the most recent bars to theoretically give you a better indication of which way price is going. Those same plots are included in this new indicator as well.
I also include the capability to bypass the adaptive period and use a static period. There is a parameter called StaticPeriod which by default is set to 1. Setting to 1 enables the adaptive period and setting it to anything other that 1 causes the adaptive code to be bypassed and your static period is used. I suggest using a period of 10. You'll be surprised at how smooth it is as compared to a normal 14 period CCI.
Just like with the adaptive CCI, you can select up to 4 of the alternate CCIs to be plotted and can also select the number of bars each of these alternate CCIs will use. You can look at the code to find out what this setting actually does. By default, 4 are plotted.
When using the adaptive period, you can change the adaptive period that the algorithm calculates by setting the PeriodMultiplier parameter to some integer value like 2, 3, 4 ... So, if the algorithm calculates a period of 14, a PeriodMultiplier setting of 2 will change the period to 28.
Other parameters included are a smoothing factor for both the main CCI and the Alternate CCIs, DisplayRules set to true causes triangles to be plotted on price when all the Alternate CCIs are pointing in the same direction. Really this is the same thing as the histogram at this point. I anticipate modifying the rules in a way that actually evaluates other criteria so possible entries are identified with these triangles. As I said, the triangles reflect the exact same thing as the histograms. Oh by the way, I guess I should explain the histograms.
The histogram color tells you which direction the alternate CCIs are pointing. Red tells you that all the alternate CCIs are pointing down, blue is up, and gray means they are pointing in different directions. A good way to watch for reversals is to look for the CCI pointing one direction and all the alternate CCIs are pointing in the opposite direction. Obviously this doesn't work very well when a divergence is occuring. But, I think there are other ways to identify when a divergence is occuring so you don't take the reversal entry and get caught.
Now back to the other parameters...The last parameter set is the SessionEnd and SessionStart. These only apply to the DisplayRules parameter. If DisplayRules is set to true then the triangles are only plotted between those hours.
I think that about covers it. I hope you like this and find it useful. I'm still defining how I want to use it so am still unclear if I will be using it long term or not. Tomorrow, March 31, will be my first day to actually use it trading.
Good luck and I look forward to your comments.
Mike Winfrey
By the way, the adaptive cci had a problem coloring the histgrams correctly. That problem is corrected in this indicator.
The indicator uses the adaptive CCI code so you have a variable period that is based on John Ehlers work. Same code as you saw in the Adaptive CCI Gumphrie and I posted some time ago. That indicator also plotted 4 additional CCIs that calculated price in a way that weighted those plots to the most recent bars to theoretically give you a better indication of which way price is going. Those same plots are included in this new indicator as well.
I also include the capability to bypass the adaptive period and use a static period. There is a parameter called StaticPeriod which by default is set to 1. Setting to 1 enables the adaptive period and setting it to anything other that 1 causes the adaptive code to be bypassed and your static period is used. I suggest using a period of 10. You'll be surprised at how smooth it is as compared to a normal 14 period CCI.
Just like with the adaptive CCI, you can select up to 4 of the alternate CCIs to be plotted and can also select the number of bars each of these alternate CCIs will use. You can look at the code to find out what this setting actually does. By default, 4 are plotted.
When using the adaptive period, you can change the adaptive period that the algorithm calculates by setting the PeriodMultiplier parameter to some integer value like 2, 3, 4 ... So, if the algorithm calculates a period of 14, a PeriodMultiplier setting of 2 will change the period to 28.
Other parameters included are a smoothing factor for both the main CCI and the Alternate CCIs, DisplayRules set to true causes triangles to be plotted on price when all the Alternate CCIs are pointing in the same direction. Really this is the same thing as the histogram at this point. I anticipate modifying the rules in a way that actually evaluates other criteria so possible entries are identified with these triangles. As I said, the triangles reflect the exact same thing as the histograms. Oh by the way, I guess I should explain the histograms.
The histogram color tells you which direction the alternate CCIs are pointing. Red tells you that all the alternate CCIs are pointing down, blue is up, and gray means they are pointing in different directions. A good way to watch for reversals is to look for the CCI pointing one direction and all the alternate CCIs are pointing in the opposite direction. Obviously this doesn't work very well when a divergence is occuring. But, I think there are other ways to identify when a divergence is occuring so you don't take the reversal entry and get caught.
Now back to the other parameters...The last parameter set is the SessionEnd and SessionStart. These only apply to the DisplayRules parameter. If DisplayRules is set to true then the triangles are only plotted between those hours.
I think that about covers it. I hope you like this and find it useful. I'm still defining how I want to use it so am still unclear if I will be using it long term or not. Tomorrow, March 31, will be my first day to actually use it trading.
Good luck and I look forward to your comments.
Mike Winfrey
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