The Basics of (cci indicator)

The commodity channel index (CCI indicator) is used to identifying what is a good time buy and sells in the market based on overbought and oversold conditions.

Indicator type:- commodity channel index indicator is a momentum indicator.

Market works:- All cash market and future market ( please note:- CCI not for options market)

Works best:- Commodity channel index (CCI indicator) basically developed for commodities but this indicator works best in all markets.

Formula:- The commodity channel index (CCI indicator) starts with the averages of the high, low and close price calculation’s previews number’s of periods and compare with currents price then give you negative/positive situation’s.

Parameters

Normally commodity channel index (CCI indicator) used is (20 periods) parameter and CCI line move in (+100 to -100) default setting is (20 periods) but you easily change this setting as per your trading time periods and depend on your comfort.

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Theory

The commodity channel index (CCI indicator) measure and then give you different between in current price and previews average price. Very simple understanding this indicator gives you current price strength (negative/positive) and identifying a bullish and bearish situation in the markets with overbought and oversold. This indicator gives you very and clear-cut buying selling signals.

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Interpretation 

The commodity channel index (CCI indicator) fluctuations between negative 100% and positive 100%. Very simple interpretation this indicator buy above positive 100%  and sell below negative 100% this is very powerful trading tool trading Chanakya hopes this indicator gives you lots of money.

One another method of analysis commodity channel index indicator close you are all position (long and short) when the CCI line crosses the zero line and make another position then CCI line crosses +100 / -100

Calculation 

 

Commodity channel  index (CCI)

= Typical Price – (number of periods sma of typical price)

(0.015* mean deviation)

 

typical price = (high price + low price + close price) /3

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