CCI+RSI+EMA Strategy with Percentage or ATR TP/SL

The CCI+RSI+EMA Strategy with Percentage or ATR TP/SL indicator is a momentum-based trading tool designed to identify reversal opportunities in overbought or oversold conditions while filtering for the prevailing trend. It combines the Commodity Channel Index (CCI) and Relative Strength Index (RSI) for entry signals, utilizing an Exponential Moving Average (EMA) to ensure trades align with the long-term market direction.

Usage

This strategy is used to capture mean-reversion moves or trend pullbacks. A long entry is triggered when the CCI crosses above the oversold level, provided the price is above the EMA (if enabled) and the RSI confirms the oversold state (if enabled). Conversely, a short entry occurs when the CCI crosses below the overbought level while the price remains below the EMA and RSI is in overbought territory.

The strategy includes flexible exit logic:

• Dynamic Exits: Positions automatically close when the CCI reaches the opposite threshold (e.g., a long trade closes when CCI crosses the overbought level).
• Risk Management: Users can toggle between percentage-based or ATR-based exit levels to manage profit targets and stop losses.

Details

The script integrates three primary technical concepts:

• CCI: Measures the current price level relative to an average price level over a given period. High values indicate strength, while low values indicate weakness.
• RSI: Acts as a secondary momentum filter to ensure the asset is sufficiently stretched before an entry is considered.
• ATR: Used specifically for the volatility-adjusted TP/SL method, allowing the strategy to breathe during high volatility and tighten up during low volatility.

Settings

CCI

• CCI Length: The lookback period for the Commodity Channel Index calculation.
• Overbought: The level above which the asset is considered overextended to the upside.
• Oversold: The level below which the asset is considered overextended to the downside.

RSI

• Use RSI: Enables or disables the RSI filter for entries.
• RSI Length: The lookback period for the Relative Strength Index.
• RSI Overbought/Oversold: Thresholds required for RSI confirmation.

EMA

• Use EMA: Enables the trend filter; long trades only above the EMA, short trades only below.
• EMA Length: The period for the trend-detecting Exponential Moving Average.

TP/SL Method

• Percentage TP/SL: Uses a fixed percentage of the entry price to set exit levels.
• ATR TP/SL: Uses market volatility (ATR) multiplied by a factor to set the stop loss, with the take profit determined by a risk-reward ratio.
• Take Profit (%) / Stop Loss (%): Specific values for the percentage-based exit method.
• ATR SL Multiplier / Risk Reward Ratio: Specific values for the ATR-based exit method.

FAQ

How do I access this indicator?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.

Can I use this strategy without the EMA filter?

Yes, you can disable the "Use EMA" setting in the inputs menu to allow the strategy to take signals regardless of the long-term trend direction.

Does the strategy plot the EMA on the chart?

No, the script is designed as a non-overlay strategy to keep the CCI oscillator clear. If you wish to see the EMA, you should add a standard EMA indicator to your chart with the same length.