Commodity Channel Index Breakout

Entry Logic

• Exact Entry Trigger: Enter long on a breakout and close above the +100 level. Enter short on a breakdown and close below the -100 level.
• Confirmation: The breakout should occur from a period where CCI was between -100 and +100.
• Timeframe: Daily.
• Market Condition: Start of a new, strong trend.

Exit Logic

• Profit Targets: Exit when CCI crosses back inside the -100 to +100 zone.

Stop Loss Structure

• Hard Stop: Place stop at the zero line of the CCI.

Risk Management Framework

• Risk Per Trade: 1.5% of account capital.

Position Sizing Model

• Sizing Approach: Volatility-based sizing.

Trade Filtering

• Market Conditions to Avoid: Choppy markets.

Context Framework

• Trend Direction: The breakout determines the trend direction.

Trade Management Rules

• Let Profits Run: Stay with the trade as long as CCI remains in the extreme zone.

Time Rules

• Session Notes: A swing trading system for capturing strong trends.

Setup Classification

• A+ Setup: A breakout that occurs after a prolonged period of consolidation.

Market Selection Criteria

• Instruments: Commodities and volatile stocks.

Statistical Edge Metrics

• Win Rate: 35-45%.
• Profit Factor: 2.5.
• Expectancy: 0.7R.

Failure Conditions

• Strategy Fails: On false breakouts (whipsaws).

Psychological Rules

• Discipline: Tolerate a lower win rate to capture large, explosive moves.

Advanced Components

• Optimization: The CCI period can be optimized for different markets.

Location

• Strongest: At the beginning of a "new season" for a commodity or stock.