CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

The Coppock indicator

The Coppock indicator is a price momentum indicator. Edwin Coppock, an economist, designed the indicator in 1962. Some traders use the Coppock indicator as an overbought or oversold indicator. Other traders use the indicator to generate trading signals.

Edwin Coppock, being an economist, created the indicator to measure, not to trade. Therefore he never added a stop order, a profit target, a signals filter and other components, which are part of most trading strategies.

These are the advantages of the Coppock indicator:

  • A precise indicator of price momentum.
  • The indicator can be applied to every instrument.
  • The indicator can be used in any time frame.
  • Easy to understand and easy to use.
  • The indicator is FREE.

Coppock originally designed the indicator to signal a change in price momentum when the line crosses the zero line. An upwards cross being bullish and a downwards cross being bearish. This example shows the traditional interpretation of the Coppock indicator and the ensuing trading signals.

The Coppock indicator.
 

Over the years many traders considered the traditional crossover not reactive enough. They started to interpret a turn in the Coppock line as the signal. This example shows the buy and short sell signals when the indicator turns.

Edwin Coppock's indicator.
 

In the platform traders can choose whether they only want to see the indicator or if they also want signals. If they want signals they can choose between the two signal types. This example shows trading signals based on the traditional interpretation of the Coppock indicator. The trader simply uses the reverse signal to close an open position.

Trading strategy and trading signals based on the Coppock indicator.
 

Practical implementation

Open the chart of the instrument you wish to trade.

In the WHS Proposals folder, select the Coppock indicator.