First I would like to thank Jim O’Connell of PFG (Peregrine Financial Group and
Peregrine Charities) for reworking this document. This was needed very badly as
the original needed to be updated. Jim spent many hours and hard work putting
together the correct info and CCI documentation so that traders worldwide would
have something to help them in there trading careers and learning CCI. Jim has
gone past “traders helping traders” excellent work, and hope all who read it and
learn CCI will be successful and thank Jim…JIM WELL DONE
We hope that after reading this text, you will get the basic idea of Woodies CCI system,
an ability to recognize his entry and corresponding exit patterns. This will also serve as a
reference for all of the vocabulary used in Woodie’s community of traders, so you will be
able to ask questions and understand the lingo throughout the trading rooms.
Woodies goal is “Traders helping traders”. It is my hope that this text will do just that.
Woodies CCI charts
Chart 1 below shows a single yellow horizontal line. This is called the Zero-line (ZL).
It has a special meaning in the calculation of the CCI. You may think of it as the
equilibrium of momentum over a given period. All of Woodies CCI system trade
patterns are defined around the zero-line. The chart shows four other lines. The light
blue are the 100/-100 lines and the white are the 200/-200 lines.
Chart 2 shows the ZL as a series of red and green segments. These segments reflect the
25 period Least Squares Moving Average LSMA. When the segments on the ZL are
green, this means that the market price is higher than the LSMA. When red, the market
price is below the LSMA. This is also called the moving linear regression curve. The
LSMA will be used in trade confirmation of patterns and exiting positions. It is not
important to understand how the LSMA is calculated.