#1 - Woodies CCI Zero-line Reject (ZLR) Pattern:
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
chart 1
Zero-line Reject (ZLR) long
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.
chart 2
Zero-line Reject (ZLR) long
TREND TRADE
In chart 2 above we exit on a CCI hook.
chart 3
Zero-line Reject (ZLR) long
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.
3 Charts Below � Zero-line Reject (ZLR) short trades.
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
chart 1
Zero-line Reject (ZLR) short
TREND TRADE
In chart 1 above we see that the ZLR was close to the ZL. The exit on this trade was a CCI hook.
chart 2
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.
chart 3
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.
