Statement by NickTrader
For a newbie learning the CCI method they should concentrate on that only and remove ALL other noise that could confuse CCI issues. I made that very same mistake at beginning after you have a very clear understanding of CCI, and can use it successfully in trading, then you can add other things that you may find beneficial, BUT these imo must be limited otherwise you can get confusing signals.
NickTrader 06/01/2003

Question Time with Nick Trader 05/31/2003

QUESTION 1. Nick, how long have you been trading for a living?
2 yrs and have been day trading since 98 part time, it was great for 2 yrs, buy anything wait for a while and you make money :-)
Not the same these days, in January 2000 I went full time and then the market near takes me out when the bubble burst.

QUESTION 2. How do handle conflicting signals? A trend line break w/reg div but the signal is heading into a possible 0 bounce?
A reg diver is a counter trend trade and often it will reject at zero if there is a good trend running,. Best to trade with the trend and look for rev divers and enter on zero reject which will often be the #2 point on the rev diver.

QUESTION 3. So ignore the trend line break and the countertrend trade. When do you take those trades?
I watch LSMA and once it has made a turn and get a CCI TLB, and a reg diver and a cross of +/-100 line than i will enter counter trend trade but there is still possibility of zero reject so often I will exit there and wait for next signal either a cross of zero for continued direction or a reject.
I've also noticed that the angle of the CCI line approaching zero line has an impact. The more vertical the line is, the higher probability it will cross.

QUESTION 4. Do you always put on more than 1 contract and are stops the same all the time or are they determined by the chart?
My stops are always 1.5 however, I will tighten the stop if the trade is not going my way in a reasonable time usually to 1 pt or even BE if its been in the trade for a long time and don't see a follow through.

QUESTION 5. Targets are all based on cci patterns?
I don't use targets but you could speculate as to where the CCI will go. Example, in a strong uptrend where the CCI has made a hook at extreme, I will often wait for a close below the LSMA before considering an exit on the next CCI signal, which could be a divergence with a TLB and cross of +100 line. Often in a strong trend, even after an extreme signal the price will continue to rise after rejecting the LSMA line. And often the CCI will hook up at the +100 line at the LSMA reject. The CCI at this point will often head up after the +100 reject and then hook to establish the #2 point for a diver TL and if it continues down to break the UTL and then cross +100 it is a good place to exit or establish a new short trade. These patterns are repeatable and one can use them for speculating targets. But they are all based on CCI signals as they develop and not on price prediction.

QUESTION 6. How do you know when to exit?
On a CCI signal, for example, if I am in a long with an uptrend, I will look for the price to cross LSMA and then look for a CCI signal for the exit.

QUESTION 7. Do you use longer time frames to trade or just 3 min?
3min for signal setups, within a longer timeframe such as the 13min is good, and then i use 1min for entry/exit signal timing but I don't recommend using 1min unless you are prepared to scalp a lot as the signals are fast and many, so i have to have the signal develop on 3min first before moving to 1min for entry/exit timing, I don't take a 1min signal alone only, it must have started on 3min first, that's to avoid all the false signals otherwise you will be whipped to death.

QUESTION 8. If you get a 13min signal you would still use 1min for entree?
You CAN trade the 1min BUT you must be extremely fast at entries and exits and be prepared to scalp for 1pt or less. Yes because in that 13min bar i want to enter near bottom, so the 3min will let u look inside the 13min as the 1min does to even a finer granularity. But the key is to stay within the context of the longer time frame if it has a good trend and time entry/exit at a fine granularity of 1min for example. You can take that to the next level and use a tick chart for even finer granularity.

QUESTION 9. Do they ever conflict?
The conflict will be within the context of the higher timeframe, for example, if the 13min is in uptrend but 3min is in downtrend. This is often confusing until you figure out that you must see the context, where it is in relation to higher timeframe. 13min is a long time and will have plenty of opportunity to cycle through, as does the 1min in relation to 3min.... this is key to figuring out how to time the orders.

QUESTION 10. Do you stop trading after any consecutive amount of losses?
No, you just keep trading the signals. You cant be 100% so a loss or a series of losses is normal. The laws of probability are on your side if you have a winning system.
Higher timeframe always rules within that time. BUT this is what I have been referring to here in previous posts, you must figure out how it relates to a lower timeframe.
There is a relationship present.

QUESTION 11. So are you saying the 13 always rules? Like you said where u are in the 13 min bar before it prints.?
The 13 could be in long trend but the 3min will make possible many highs lows cycles within that 13 min timeframe but if 13 is going up then the final outcome of 3min after all the gyrations will be higher. Do you follow my logic on that? trying to get a good representation so i can explain it, I can see it clearly.
Example... you understand a sine wave shape? if you take a simple sine wave and superimpose another sine wave on top of the sine wave line you will get same effect as a 13min to 3min relationship. Therefore, you will get a series of small oscillations on top of the longer sine wave. So those smaller oscillations on top of the longer sine wave are like the 3min oscillating on top of the 13min timeframe, that is the relationship u must have clear to be able relate a lower timeframe chart like 1min to a 3min chart then you can resolve the conflict of the 2 timeframes moving against each other therefore you always have to relate to a higher timeframe that always rules.

QUESTION 12. If I got this right you still would only trade the bottom of those oscillations if the trend was up??
Yes that's the entry key the exit key is the top of those oscillations.

QUESTION 13. So you would do very little countertrend stuff?
If you are scalping within that higher timeframe a diver is a divergence from the price. CCI diver that is, while price is making new highs, the CCI is making new lows or visa versa in a downtrend, that is, prices making new lows, the CCI is making new highs.

QUESTION 14. So it has nothing to do with crossing +100 line and a diver is regular divergence.?
No, that is an entry signal or confirmation to entering the trade.
The diver is established as soon as the CCI hooks to give a point to draw a trend line on, if that trend line is heading down, for example while the similar points on a price can be used to draw a trend line that is heading up, then u have a divergence. But when the CCI crosses the 100 line after that 2nd point is put in, it is a confirmation that the CCI has momentum to move down and a trade can be entered.

QUESTION 15. I noticed on some of the charts you posted that you had trend lines drawn on the 3 and 1 min charts....When you are actually trading do you draw the trend lines prior to taking your trades?
No, I was doing that yesterday just for examples for those wanting to get clarification on drawing trend lines and seeing the divergence etc. I don't have time to be drawing no stinking trend lines when trading ;-) However, until you can see them ALL clearly in your sleep, I recommend you draw them.

QUESTION 16. And nick you would take that trade counter to 13min?
Yes I would take a counter within the 13, on a 3min chart for example cause there is plenty of opportunities for a few cycles of price gyrations within that 13min timeframe but that's my style of scalping.... jennann for example would hold through all those gyrations (cycles) or pullbacks or add on the pullbacks for the longer timeframe hold, it all depends on your style of trading, that's something only you can decide how you want to do trade, that's all about trade management.

QUESTION 17. Any tips I tend to blow up and stop because I either freeze or chase when I get mad. or chicken and don't pull the trigger because of lack of confidence. Were you ever a nervous trader? How did you work through that?
LOL, I am always a nervous trader ;-) Seriously, the most difficult part is having confidence in the indicator, u must have that first and then deal with the emotional roller coaster ride, another difficult aspect. If u can keep out the emotions and fear of losing ( remember u will always have some losing trades) you will have accomplished the most difficult part and just trade the signals.

QUESTION 18. Have you only traded the cci?
No, I been day trading since 98 part time, and full time since 2000 scalping bios and semis on NAZ using L2 and bunch of other indicators. Now i just use CCI and a few MAs been trading e-minis for about a year now using CCI.

QUESTION 19. Were you as successful earlier?
NAZ was fun and great, very profitable but much more difficult requiring tons more equity to put on a trade, risking much more capitol. It was much more difficult imo.

QUESTION 20. You just need to put in enough screen times seeing that the pattern works to have confidence in it that helps with the fear but what you were doing was working?
You must have chart time, as with anything the more you do it the better you get at it. I can see where this going.... so why change.

QUESTION 21. No it's that u are over the hump. your confidence level and skill are there. I would think you would have to evolve.
Because i wanted to have more leverage, plus i got tired of all the market maker games on NAZ, plus all the prep work of reading financials, looking for upgrades/downgrades, IPOs,, what stock was favoured, what stock was running, company management games, CEO games et etc....

QUESTION 22. But you trust yourself and system that's big plus you killed the e-minis Laughing out loud !
Plus the signals are much cleaner on futures and the indicators tend to work much better, so much easier focusing on one symbol or at least just a few symbols to look at, not hundreds, liquidity is amazing, and no MM games, I am down from using 8 monitors when trading NAZ to 2 now trading eminis.

QUESTION 23. A seldom discussed aspect of all this is the precision entry.
Your entry is key to profitable trades imo.

Nick Thanks ! for the inductive lesson
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Nick Trader 05/31/2003

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