There are currently 8 patterns in Woodies CCI

Woodie has defined all of them. Do not follow any other methods, patterns or systems. They will add another level of complexity and will only serve to confuse you while you are learning this system.

Do not rename any of the patterns. I?m sure it is very obvious why this shouldn?t be done but some still try to do it. You could go ask the traders that tried this but they are no longer trading. Just stick to the system as Woodie has defined it.

Woodie is researching and testing new patterns all the time. He will let us know when he finds another great new pattern.

Woodies CCI Patterns can be used on any time frames. It can even be used very successfully on daily charts and larger time frames as well. Note that Woodie uses a CCI 20 period on charts with daily time frames and larger. He does not use the TCCI at all on the daily or larger time frame charts.

You want to take CCI patterns that are robust, full-bodied, and clear. Not ones that are constricted, tightly wrapped around the zero-line, condensed or strange looking. There are far too many trades to take during the day for you to force a bad trade. Re-read this again and again. Follow it closely. This is one of the parts of Woodies CCI system that keeps you from over trading. You do not need to think about overtrading. Just follow the guidelines and it will be taken care of automatically.

The Woodie CCI Patterns that we use to trade are as follows and are not necessarily listed in order or winning percentages.

   

1 Zero-line Reject (ZLR) 

   

2 Shamu Trade

   

3 Trend Line Break (TLB)  

   

4 Vegas Trade (VT)  

   

5 Ghost Trade  

   

6 Reverse Divergence (rev diver)  

   

7 Hook from Extremes (HFE) 

   

8  Horizontal Trend Line Break (HTLB)  

trend 

   

counter-trend

   

both

   

counter-trend

   

counter-trend

   

trend

   

counter-trend

both

A zero-line reject (ZLR) pattern is a CCI bounce off of or near the zero-line (ZL). It can bounce off of or near the zero-line anywhere from +100 to ?100 for both long and short trades. Some people like to narrow the range down to +/- 50 which can provide a better pullback. The entry would be the first bar that rejects or flips up away from the zero-line.

The market psychology behind Woodies CCI ZLR pattern is that it shows traders when to buy the dips and sell the pullbacks. No other indicator in the trading world can do that except for the CCI.

You can combine the ZLR pattern along with a trend line break (TLB) pattern to add strength to the signal for a greater probability of success. If using the ZLR along with the TLB then you would wait for the CCI to cross the TLB pattern to enter. You will learn more about the trend line break (TLB) pattern later in this document.

The ZLR trade is a trend trade. New traders of Woodies CCI should be taking this type of trade. In fact this could be the only Woodies CCI pattern trade you take during your entire trading career and still create excellent profits for yourself

3 Charts Below  Zero-line Reject (ZLR) long trades.

The yellow lines show the ZLR patterns. The single white lines show where the entry would be and the double white lines show where the exit would be

TREND TRADE

Notice that chart 1 above shows two ZLR long trades. They both bounce off the ZL within the +/-100 area. We enter a ZLR when the CCI line first starts to reject the ZL or we can say the first bar that flips away from the ZL.

In chart 1 above we exit the first ZLR on a CCI hook and the second ZLR we exit on a TCCI cross into CCI.

TREND TRADE

In chart 2 above we exit on a CCI hook.

TREND TRADE

In chart 3 above we exit on a TCCI cross into CCI.

Notice that on chart 3 above the CCI hooks at the same time the TCCI hooks which gives us two exits signals at the same time.

The yellow lines show the zero-line reject patterns. The single white lines show the entry for this type of trade and the double white lines are the exit signals.

The exit signals are the same as in any other trade. Go review the section on how to enter and exit trades.

It is very important to remember that when you take one of these trades it does not mean you are supposed to stay in it forever. Always follow Woodies CCI exit signals

In chart 1 above we see that the ZLR was close to the ZL. The exit on this trade was a CCI hook.

Zero-line Reject (ZLR) short

TREND TRADE

In chart 2 above we also see a ZLR close to the ZL. There are two exits on this chart. One is a TCCI cross of CCI and the second exit is a CCI hook. We don?t know what the trade will give us before we get in and we don?t care. We take the exits as they come and it works out very well.

Zero-line Reject (ZLR) short

TREND TRADE

In chart 3 above we see two ZLR trades. The first ZLR exit is a CCI hook. Notice that the second ZLR is a bounce off the zero-line from the opposite side. This is fine. In fact it could go as high as +100 and we could still take it as a ZLR short trade. Remember that some people prefer to take ZLR trades that are closer to the ZL within the +/-50 area.

Zero-line Reject (ZLR) short

TREND TRADE

 

A shamu pattern is when the CCI passes through the zero-line (ZL), flips back around and comes through the ZL again, and then once again turns around and crosses through the zero-line to continue its original direction. It?s sort of a zigzag pattern around the ZL. It doesn?t have to be directly on the zero-line but it?s better when it is. When the zigzags on the CCI happen within the +/-50 area it makes for a better pattern.

Notice that the shamu trade pattern is a failed zero-line reject pattern. Originally it was a ZLR pattern. But the ZLR turned around and failed so we had to exit. This is why you do not wait around and hope a trade is going to correct itself and go back your way. If you were in all of these trades as the initial ZLR trade and it turned on you but you did not exit then you would be racking up potentially large losses. You must exit based on the guidelines Woodie has created. That is the defined system. You have no choice.

The shamu trade is a counter-trend trade and was developed as a type of stop-and-reverse (SAR) trade to the failed ZLR. New students of Woodies CCI should not be taking this type of trade. However, keep your eye on it and learn as you progress

The yellow lines show the CCI pattern.  The single white lines show where the entry would be and the double white lines show where the exit would be. The single white lines show the entry for this type of trade and the double white lines are the exit signals.

A Shamu Trade failure pattern is not shown. A failure of the Shamu Trade would be yet another swing back through the zero-line after our trade entry to take out the other side of the prior swing low/high. It does happen and all you do is exit based on the rules defined by Woodies CCI.

On all 3 charts there are two possible entry points shown as single white lines. It depends on if you always add confirmation signals to your trades. If you do then when taking the shamu trade then let it take the swing high/low out for the entry signal. However, most people would enter the trade on the first white line. If however the shamu pattern is a perfect one and is evenly split across the zero-line then the entry could be the zero-line cross (ZLC).

The exit signals are the same as in any other trade. Go review the section on how to enter and exit trades.

It is very important to remember that when you take one of these trades it does not mean you are supposed to stay in it forever. Always follow Woodies CCI exit signals.

Shamu Trade long pattern

Counter-trend trade

Shamu Trade long pattern

Counter-trend trade

Shamu Pattern Short

Counter-trend trade

Chart 2  shows two possible exits for the trade. The first set of double lines is when the TCCI is crossing into the CCI. You would exit your first contract at that point. If you were trading more than one contract you would then set the rest to b/e+1 and wait for the next exit signal to come. We see that the second exit signal is the second set of double white lines showing the HFE exit signal.

Chart 2 shows a shamu trade pattern that doesn?t quite come down below the zero-line. That?s ok. Not every pattern can be perfect. It's still a valid shamu trade.

 

A Trend Line Break pattern uses two or more decent sized bumps, using CCI or TCCI, to lay the trend line across them. Then when the CCI crosses or breaks that trend line (tl) that is the signal to enter the trade. One end of the trend line should be at CCI value +/-100 region or greater for it to be valid. Also, the more bumps you lay it across the more valid that trend line is. Using only two bumps is normal and creates a perfectly valid TLB. You can also mix the use of CCI and TCCI bumps for each trend line. This pattern is also used as one of the exit signals and as a CCI confirmation signal too. It comes in quite handy and is widely used in Woodies CCI system.

The TLB trade can be both a trend and a counter-trend trade. New students of Woodies CCI should be taking this type of trade if it is a TLB with the trend. Do not take this trade against the trend. However, keep your eye on it and learn as you progress.

You can combine the zero-line reject (ZLR) pattern and the reverse divergence (rev diver) pattern along with a TLB pattern to add strength to the signal for a greater probability of success. When combining these together you would still enter on the break of the trend line, as it will occur last.

Another method of entry on a TLB trade is to use the CCI confirmation signal cross of the +/- 100 value. This provides a greater chance that the trade will be successful. You do not have to use this method and you may get more profit on the TLB trade if you get in well before this point. However, if you do not add the CCI confirmation of a +/- 100 cross then your TLB trade might not work out so often. Pick a method and stick with it. Don?t change daily.

You will very often find the TLB and ZLR show up together. Sometimes the rev diver pattern will show up with them as well. You should start to notice that CCI patterns all come one after another and also form together to make stronger signals. Do not let this confuse you. You only need one CCI pattern to take a trade. However if you combine more than one signal it adds to the probability of success for that trade.

The yellow lines show the CCI pattern. The single white lines show the entry for this type of trade and the double white lines are the exit signals.

Note that all 3 charts show the Trend Line Break pattern with the trend. No TLB counter-trends are shown. In the 1st chart we can see how the TCCI was used to draw the Trend Line Break trade. This is valid and works well.

The exit signals are the same as in any other trade. Go review the section on how to enter and exit trades.

It is very important to remember that when you take one of these trades it does not mean you are supposed to stay in it forever. Always follow Woodies CCI exit signals.

Trendline Break Pattern Long

Trendline Break Pattern Long

There are two exit signals. One is where the TCCI crossed into the CCI. The second exit is when the CCI hooks.

The entry method of waiting for the CCI cross of the +/-100 is shown in the 2nd chart but just happens to be there by coincidence

Trendline Break Pattern Long

 

The Vegas Trade Pattern is a combination of several things. First it needs the hook from extreme (HFE) CCI pattern and then a set of CCI bars shaped into a partial circular or rounding pattern following that. These rounding bars must be at least 3 bars minimum and can occur toward the zero-line or against it. In other words the rounding can be in any direction regardless of what side of the zero-line (ZL) the entire pattern is being formed on. However, the entire VT pattern must form on the same side of the zero-line.

This means that the swing high/low part of the pattern doesn?t have to be the rounding part of the pattern.  However, it is a stronger signal when the swing high/low is the rounded part. Also, it can even have two or more swing high/lows as well. The rounding is very important to the overall pattern and indicates a struggle that may well lead to a strong trend reversal.

That last part of the pattern is the trend line drawn straight across from the recent swing high or low. A break of this swing high/low is our entry into the trade.

The entire Vegas Trade pattern can have anywhere from around 8 to 12+ bars but when it gets too far spread out past that before an entry signal is seen then the probability of success is lowered and the strength of move could be less.

The Vegas Trade pattern indicates a potential for a very strong change in the trend.

Also, Woodie strongly recommends the use of the 25-lsma indicator as an additional criterion for VT entry. When the 25-lsma indicator shows that price is on the side of the direction of the VT entry then there is a greater likelihood that the trade will be successful. LSMA stands for Least Squares Moving Average and can also be found in some charting packages as Linear Regression Curve.

In other words, if the VT is setting up for a long entry then you want price to be above the 25-lsma indicator and, if possible, you also want the 25-lsma to be pointing in the upward direction as well. If a VT short is setting up then you want the price to be below the 25-lsma and, if possible, you want the 25-lsma to be pointing downward. Since we do not use prices to trade Woodies CCI system it is recommended that you do not view prices just to see a 25-lsma indicator. Rather, use a 25-lsma indicator placed in the CCI region that displays colors showing these four conditions.

The VT Trade is a counter-trend trade. New students of Woodies CCI should not be taking this type of trade. However, keep your eye on it and learn as you progress.

Vegas Trade Pattern Long

counter-trend Trade

Vegas Trade Pattern Short

counter-trend Trade

Vegas Trade Pattern Short

counter-trend Trade

Chart 1 shows very limited rounding. Neither the swing high after the HFE nor the swing low after that shows very good rounding. It has 3 bars of rounding minimum so it?s still valid. However, be careful as it could likely fail as a result of that. It may be best to stay away from this trade since it does not have the good rounding expected. There will be many other vegas trade (VT) patterns that could be taken so passing on a lame one won?t hurt.

Chart 2 shows rounding on the swing low and the swing high. The entry signal is still the break of the swing low since it is above the zero-line. Notice that the entire pattern is more than 12 bars so the probability for success is far less

Chart 3 shows very nice rounding after the HFE pattern. The best Vegas Trade patterns have the swing high/low part as the rounding section. It also shows an interesting sharp flip of the CCI bar downward that happens next and breaks the swing low. Since it broke the recent swing low, in this case, it gives us our CCI entry signal to take the trade

All CCI patterns can not be perfect but keep in mind that the closer the pattern conforms to the definition the greater the likelihood that it will be successful.

Remember that you will want to only take trades where the 25-lsma indicator shows that prices are on the side of the trade and, if possible, the 25-lsma indicator also is pointing toward the direction of the trade. The 25-lsma indicator is not shown in these charts. If it were shown you would see it located on the zero-line in the CCI section using a multi-color indicator to display it.

The exit signals are the same as in any other trade. Go review the section on how to enter and exit trades.

It is very important to remember that when you take one of these trades it does not mean you are supposed to stay in it forever. Always follow Woodies CCI exit signals.

The Ghost Trade pattern has 3 bumps in it. It has an arm, a head and then another arm in its pattern. The bumps used to spot this pattern can be made from the CCI or the TCCI. However, most people use CCI bumps for this pattern.  It is preferable that the head is larger then the arms. To determine the entry point for the Ghost trade you draw a trend line across the underside of the Ghost across its neckline.

You can gauge the expected CCI movement for the Ghost Trade by measuring the distance from the top of the head to the neckline. The expected movement would then be a movement of that same distance from the neckline in the opposite direction to that of the head. You do not need to bother calculating the potential CCI move from the neckline as you will be exiting the trade as soon as the CCI gives you an exit signal anyways. All you need to do is follow the exit signals as defined in Woodies CCI.

Notice that when you draw the neckline (trend line) on the Ghost pattern you combine a trend line break (TLB) pattern along with the Ghost pattern which adds strength to the signal for a greater probability of success. Sometimes the neckline will slant toward the zero-line. These are the preferred Ghost patterns over the ones in which the neckline slants away from the zero-line. However, both are fine to take.

The Ghost Trade is a counter-trend trade. New students of Woodies CCI should not be taking this type of trade. However, keep your eye on it and learn as you progress.

The yellow lines show the CCI pattern.  The single white lines show where the entry would be and the double white lines show where the exit would be.

Notice how all the necklines slant different ways. Some slant toward the zero-line and some away from it. Do not let this confuse you. Just enter the trade once it breaks the neckline, which is otherwise known as the TLB CCI pattern as well. This is yet another example of how the CCI patterns can and quite often do run together.

Be aware that the majority of the drawn Ghost pattern must be on the same side of the CCI zero-line. Sometimes a bit of it does form on the opposite side. This is perfectly fine if it is only a very small portion.

The exit signals are the same as in any other trade. Go review the section on how to enter and exit trades.

It is very important to remember that when you take one of these trades it does not mean you are supposed to stay in it forever. Always follow Woodies CCI exit signals.

Ghost Trade Pattern Short

counter-trend Trade

Ghost Trade Pattern Long

counter-trend Trade

Ghost Trade Pattern Long

counter-trend Trade

Chart 1 has a very weak right arm. Notice that the trade didn?t go very far before it hooked back up and we had to exit.

Chart 3 shows a Ghost pattern that had a double head. That?s fine. Not all CCI patterns can be perfect.

The Reverse Divergence (Rev Diver) pattern is very simple. Do not let if confuse you. However, many people find it hard to understand and even harder to spot. This shows us two things. One, the documents and explanations are too hard to understand and just possibly confuse the matter. Two, and more interesting, is that it may show us that by bringing in your prior ?knowledge? into Woodies CCI system will give you headaches when trying to understand it.

This pattern was named using words that remind you of things you have tried to learn before. Maybe that is the reason why people find it so hard to spot. Forget the name and do not let it conjure up your past knowledge. None of that will help you and is absolutely not needed any longer. So forget everything you think you know about it. Do not question the pattern or why it works at this stage. Just learn to spot its ?look?. It?s a very simple pattern I assure you.

You do not need prices to trade the Rev Diver pattern. You do not need to verify that it is a true reverse divergence pattern against price before you enter the pattern. We do not use prices to trade Woodies CCI system. Woodie has done many years of research and live trials on this pattern. He has determined that it truly is reverse divergence when compared to price over 95% of the time. This is why we as traders do not have to verify it against prices. We just react and take the trade. Besides, lets say it turns out not to be a true rev diver pattern when compared to price bars. The CCI will warn us anyways by showing us one of the Woodies CCI exit signals. 

Reverse divergence CCI pattern is a trend continuation pattern. We spot it by looking for two inside bumps moving closer to the zero-line. By the word bumps we mean the CCI movements up and down. Some call these peaks and valleys. We say inside bumps to represent the bumps that are within the histogram or in other words bumps that are closer to the zero-line. We never use outside bumps to spot Rev Diver patterns.

The following two rules are all you need to spot the Rev Diver pattern:

 

Rev Diver long  CCI above zero-line for 6 or more bars, two lower inside bumps

Rev Diver short  CCI above below line for 6 or more bars, two higher inside bumps

 

The Reverse Divergence Trade is a trend trade. New students of Woodies CCI should be taking this type of trade.

You can combine the Rev Diver trade with a zero-line reject (ZLR) trade or the trend line break (TLB) trade to add strength to the signal for a greater probability of success. You most always have a ZLR pattern along with a Rev Diver pattern. In fact you usually have two ZLR patterns that make up a Rev Diver since both inside bumps usually occur within the +/- 100 CCI area. The inside bumps actually represents the CCI ZLR pattern. Look at the charts closely and you will see both of them on each chart.

The yellow lines show the CCI pattern.  The two short yellow lines show the Reverse Divergence Trade pattern. The longer yellow line shows the Trend Line Break pattern that usually accompanies this trade. The single white lines show where the entry would be and the double white lines show where the exit would be.

Each chart shows a short yellow line where each inside bump can be see within the pattern. Notice that the inside bumps are closer to the zero-line as they move across the chart. Two of the inside bumps shown actually go over the zero-line. In chart 2 you can see one inside bump goes over the zero-line a little bit.

Reverse Divergence (rev diver) Pattern Short

Trend Trade

Reverse Divergence (rev diver) Pattern Long

Trend Trade

Reverse Divergence (rev diver) Pattern Long

Trend Trade

Chart 3 one inside bump goes down under the zero-line a great deal. Technically this turned into an outside bump since it went down below the zero-line.. Don?t let this confuses you. It is still a rev diver pattern but you may want to avoid ones that do this. You could instead take this as a ZLR trade on the first bar that flipped up since it only went down to ?100. Again, all of these patterns melt together in some fashion all the time. Don?t worry about it. You will be fine. Just keep on reading.

However, as you know by now, we look for the more perfect CCI patterns to trade and the rev diver in chart 3 might not be a trade to take since it does go over the zero-line quite a bit and for 3+ bars as well. It is interesting enough to note that the trade was really strong and went quite far upward anyways.  In fact, you could just ignore the rev diver pattern on chart 3 and take it as a simple TLB trade. I hope you are seeing by now that all of Woodies CCI patterns mix together or come one right after the next.

Notice that there is a zero-line reject (ZLR) pattern just before each of these rev diver entries on all 3 charts. This is not a coincidence. Lots of CCI patterns run together. Some will add to the potential for success and some will signal you to exit immediately because they are setting up a CCI trade signal against your current position. Don?t let this confuse it. It?s normal to see multiple Woodies CCI patterns combined together.

All 3 charts are showing the trend line break (TLB) pattern drawn as well. Most people use a rev diver pattern along with a TLB pattern as a signal for more confirmation to enter the trade. You can clearly see this in charts 2 and 3 where the entry is shown after the TLB is broken However, you could enter the trade right after the second ZLR CCI turn up/down that forms the complete rev diver pattern. This entry by itself would be a rev diver trade with the added confirmation of a TLB.

Chart 1 shows two exits using the double white lines. Again, the first contract or set of contracts would be exited at the first set of double lines. The remainder of the position would be set to b/e+1 and you would wait for the next exit signal.

Chart 3 shows a lower inside bump that actually goes onto the other side of the zero-line. This is a nuance and does happen. That is fine. Important to point out is that this is actually a valid zero-line reject long signal since it doesn't go past the CCI 100 area. This one goes a bit further so it could be taken with caution.

The exit signals are the same as in any other trade. Go review the section on how to enter and exit trades.

It is very important to remember that when you take one of these trades it does not mean you are supposed to stay in it forever. Always follow Woodies CCI exit signals.

The hook from extreme (HFE) trades are formed when the CCI prints a bar at or past the +/- 200 and then starts hooking back toward the zero-line. This trade is a very difficult trade. The HFE pattern is used as one of the Woodies CCI exit signals as well.

A HFE trade can happen very fast. As soon as you see it hook back toward the zero-line you enter. Make sure you have your hard stop-loss orders in as soon as you get filled on entry, as this trade can get away from you very quick. As soon as you see a signal to exit then you exit immediately.

You will get stopped out of this trade often and this can happen even without seeing a CCI exit signal. This trade has around a 50% chance of success if you take every single HFE trade you see. However it can provide you with much larger profits than losses. You must use hard stop-loss orders when trading Woodies CCI or any other system for that matter.

The hook from extreme trade is a counter-trend trade. New students of Woodies CCI should not be taking this type of trade. However, keep your eye on it and learn as you progress.

You can combine the HFE trade with either a trend line break or a +/- 100 cross CCI confirmation signal to add strength to the trade for a greater probability of success. Again, when new you are not to take this trade. There are a great many experienced traders that do not take this trade either.

The yellow hooking lines show the CCI pattern. The long yellow lines show the TLB pattern that also exists on these charts. The single white lines show where the entry would be and the double white lines show where the exit would be.

The exit signals are the same as in any other trade. Go review the section on how to enter and exit trades.

It is very important to remember that when you take one of these trades it does not mean you are supposed to stay in it forever. Always follow Woodies CCI exit signals.

Hook From Extremes (HFE) Pattern Short

counter-trend Trade

Hook From Extremes (HFE) Pattern Short

counter-trend Trade

Hook From Extremes (HFE) Pattern Long

counter-trend Trade

Chart 1 we enter on the first CCI bar that flips back toward the zero-line when outside of the +/-200 CCI area. There is no real defined trend line since we do not have any nice bumps to draw it on. This is fine.

Chart 2 shows the entry after the break of the trend line and two exit points. The first exit is when the tcci hooks through the CCI. The second exit is also a tcci hook into the cci and the cci is starting to hook at the same time as well.

Charts 2 and 3 are showing the TLB added to the HFE trade. That provides a greater probability of success. The entry would be when the CCI line breaks the TLB pattern.

The horizontal trend line break (HTLB) trade is when a trend line is drawn horizontally across a series of bumps that are lined up in a nice straight row. You can use a mix of both CCI and TCCI bumps to draw the htl but most often you will see the CCI used in these patterns.

You can draw the trend line across these bumps regardless of whether they are inside or outside bumps as well as on either side of the zero-line. Of course since it is a horizontal trend line all the bumps will be on the same side of the zero-line. It is best to have the break of the HTLB pattern within the +/- 50 area so that there will be a greater possibility of success.

You would ideally like to have 3+ bumps on which to draw the htl. However, you must have at least 2 bumps and this is fine. Each bump at the same horizontal level can show that there is some type of support/resistance building up at that area. When broken through it can lead to a strong movement and a great trade. You will usually see a HTLB pattern in a choppy market. The HTLB trades can make for some of the very best trades during that choppy market.

The HTLB trade can be both a trend and a counter-trend trade. New students of Woodies CCI should be taking this type of trade if it is a HTLB trade with the trend. Do not take this trade against the trend. However, keep your eye on it and learn as you progress.

The exit signals are the same as in any other trade. Go review the section on how to enter and exit trades.

The yellow lines show the CCI pattern.  The single white lines show where the entry would be and the double white lines show where the exit would be.

Note that the charts are 5 min charts. Woodie says that you can have a good HTLB pattern on the 3 min chart but that the HTLB pattern on the 5 min charts are even stronger in terms of probability for success.

Horizontal Trend Line Break (HTLB) Pattern Short

counter-trend Trade

Horizontal Trend Line Break (HTLB) Pattern Long

counter-trend Trade

Horizontal Trend Line Break (HTLB) Pattern Long

Trend Trade

Chart 1 does not show the exit signal to the trade. Rather the snapshot was used to show a long term HTLB forming. This led to a very powerful move but is not shown on the chart.

Charts 1 and Chart2 show HTLB patterns that are counter-trend trades. These are counter-trend trades because the CCI is on the opposite side of the trade entry direction for 6+ CCI bars. If you are new to Woodies CCI you should not take these two trades since they are counter-trend trades.

Chart 3 shows a HTLB trade with the trend. The entry is when the CCI line breaks through the long horizontal trend line. If you are new to Woodies CCI then you should take this type of trade