CCI Divergence and Volume-Candle Breakout Signals
Summary
This indicator uses confirmed Commodity Channel Index divergence as permission to search for a breakout setup. It pairs oscillator pivots with nearby price extremes, then looks for an unusually high-volume candle. The candle’s high or low becomes a level, and a signal requires a close beyond that level within a finite window. The document also describes optional stop and target mapping: entry is assumed at the following candle’s open, the stop sits beyond the volume candle with an optional volatility cushion, and historical signals are counted by the reward multiples they reach.
The author explains design choices such as pivot matching, duplicate filtering, closed-bar updates, and level expiry, and reports a check that found the different price-pivot strengths equivalent in the tested cases. The dashboard is explicitly a reach-rate counter, not a full backtest: it omits costs, sizing, and partial exits, and resolves same-candle stop and target ambiguity against the signal. Long trends may also prevent a second pivot from forming within the divergence limit.
Key ideas
- CCI divergence arms a setup, while a later close beyond a high-volume candle’s extreme triggers the signal.
- Price pivots are searched near oscillator pivots because their turning points may occur on different bars.
- A volume level can trigger only during its limited validity window, even if its line remains visible afterward.
- Optional trade mapping uses the next candle’s open and places a stop beyond the selected volume candle.
- The reported reach counts omit costs, position sizing, and partial exits, so they are not full backtest returns.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.