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Commodity Channel Index (CCI)
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CCI identifies the deviation of a currency pair from its typical price which is the average of daily high, low and close. High values of the index point out that the price is unusually high being compared with the average one, and low values show that the price is too low.

CCI focused on movements above +100 and below -100 to generate buy and sell signals. Based on the statistical fact that 70 to 80 percent of the CCI values are between +100 and -100, a buy or sell signal will happen less than 20 to 30 percent of the time. When the CCI moves above +100, a security is considered to be entering into a strong uptrend and a buy signal is given. The position should be closed when the CCI moves back below +100. When the CCI moves below -100, the currency rate is considered to be in a strong downtrend and a sell signal is given. The position should be closed when the CCI moves back above -100.

As always, divergence in the oversold/overbought areas is considered as a good trading opportunity.



Parameters

PARAMETERDESCRIPTION
PeriodThe n-period to calculate Simple Moving Average of typical prices for CCI