Coppock Curve CFD Technical Analysis and Coppock Curve CFD Signals

Created by Edwin Sedgwick Coppock

This cfds technical technical indicator was used for technical analysis of Stocks & Commodities in the beginning but was later used to trade CFD.

The principle behind this is the psychology of trading, based on the theory that human habit is predictable. And cfd price movement always oscillates in a zigzag manner.

The principle of adaptation-level applies to how cfd price reacts at certain levels, stock and cfd prices will react in the same way or pattern as those observed historically.

CFDs Technical Analysis & Generating CFD Signals

In cfds trading, The moving average is the simplest form of an adaptation-level, the cfd price will oscillate around the moving average. This forms the basis of this indicator, which is a longer term oscillator based on this adaptation-levels(moving average), but in a different way.

Oscillators usually begin by calculating a % change of the current cfd price from some previous cfd price point, where the previous cfd price point is the reference point (adaptation-level).

Edwin Coppock reasoned that the cfd market participants' emotional state could be quantified by summing up the % changes over the recent past to get a general sense of the cfd market's longer term momentum.

For example, If we compare cfd prices relative to a year ago and we see that this month the cfd market is up 20% compared to a year ago, last month it was up 15% over a year ago, and 10%, 7.5% and 5% respectively the months before that, then we might determine that the cfd market is gaining momentum.

Basic signals can also be generated using the Coppock Curve to trade market reversals from extreme cfd price levels. Looking for divergence and cfd trend line breaks may also be combined to confirm the signal.

Implementation

The input levels of this indicator might need to be adjusted to better fit the dynamic nature of the cfd markets trading.

Coppock Curve has a zero line reference point, but this does not represent the adaptation-level but it is only a visual reference point only.