The TCCI indicator is a technical tool used in forex trading to filter out market noise and identify trend bias. It works similarly to a moving average, but with the added benefit of a dual-colored feature that alternates between green and red to indicate a possible bullish or bearish move in the market.
This makes it easy for traders to enter or exit trades when the trend changes, and it can be used for scalping, day/intraday trading, and swing trading.
To use the TCCI indicator, traders must first identify the market bias and wait for the indicator’s line to turn green or red, indicating a bullish or bearish trend. After a candle closes above or below the indicator’s line, traders can open their trades accordingly.
While the TCCI indicator is easy to use and can help traders stay longer in a trending market, it may not be suitable for a ranging market, and traders should be careful not to mistake a correction for trend reversal when a color switch occurs.
The TCCI indicator generates a buy signal when the market is in an uptrend and the color of the TCCI line changes from red to green. Traders can then open a buy position after the color switch happens and they receive signal confirmation.
A stop loss can be set just below the nearest swing low, and take profit can be set at the nearest resistance zone or when the color of the TCCI line changes from green to red.
When the TCCI Indicator changes from green to red in a downtrend, it generates a sell signal. Traders can open a sell position after confirmation of the signal switch and set a stop loss just above the nearest swing high.
The take profit can be set at the nearest support zone or traders can exit the trade when the TCCI Indicator changes from red to green.