Commodity Channel Index CCI Forex Indicator
Commodity Channel Index CCI Forex Indicator measures the deviation of the commodity price from its average statistical price.
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.
In spite of its name, the Commodity Channel Index can be applied for any financial instrument, and not only for the commodities.
There are two basic techniques of using Commodity Channel Index:
- Finding the divergences
The divergence appears when the price reaches a new maximum, and Commodity Channel Index can not grow above the previous maximums. This classical divergence is normally followed by the price correction. - As an indicator of overbuying/overselling
Commodity Channel Index usually varies in the range of ±100. Values above +100 inform about overbuying state (and about a probability of correcting decay), and the values below 100 inform about the overselling state (and about a probability of correcting increase).
Calculation:
- To find a Typical Price. You need to add the HIGH, the LOW, and the CLOSE prices of each bar and then divide the result by 3.TP = (HIGH + LOW +CLOSE)/3
- To calculate the n-period Simple Moving Average of typical prices.SMA(TP, N) = SUM[TP, N]/N
- To subtract the received SMA(TP, N) from Typical Prices.D = TP — SMA(TP, N)
- To calculate the n-period Simple Moving Average of absolute D values.SMA(D, N) = SUM[D, N]/N
- To multiply the received SMA(D, N) by 0,015.M = SMA(D, N) * 0,015
- To divide M by DCCI = M/D
where:
- SMA — Simple Moving Average;
- N — number of periods, used for calculation.
Commodity Channel Index Technical Indicator (CCI) measures the deviation of the commodity price from its average statistical price. 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. In spite of its name, the Commodity Channel Index can be applied for any financial instrument, and not only for the wares.
There are two basic techniques of using Commodity Channel Index:
- Finding the divergences
The divergence appears when the price reaches a new maximum, and Commodity Channel Index can not grow above the previous maximums. This classical divergence is normally followed by the price correction. - As an indicator of overbuying/overselling
Commodity Channel Index usually varies in the range of ±100. Values above +100 inform about overbuying state (and about a probability of correcting decay), and the values below 100 inform about the overselling state (and about a probability of correcting increase).
Commodity Channel Index CCI Forex Indicator sell signal
Commodity Channel Index CCI Forex Indicator buy signal
What does Forex Indicator mean?
A forex indicator is a statistical tool that currency traders use to make judgements about the direction of a currency pair’s price action. Forex indicators come in many types, including leading indicators, lagging indicators, confirming indicators and so on. Popular forex indicators include moving averages, relative strength index (RSI) and average true range (ATR). A forex trader must choose the indicators that fit his or her trading strategy.
How to install Commodity Channel Index CCI Forex Indicator?
- Download Commodity Channel Index CCI Forex Indicator.zip
- Copy mq4 and ex4 files to your Metatrader Directory / experts / indicators /
- Copy tpl file (Template) to your Metatrader Directory / templates /
- Start or restart your Metatrader Client
- Select Chart and Timeframe where you want to test your forex indicator
- Load indicator on your chart
How to uninstall Commodity Channel Index CCI Forex Indicator?
To shut down an indicator, one has to remove it from the chart. At that, its drawing and recalculation of its values will stop. To remove an indicator from the chart, one has to execute its context menu commands of “Delete Indicator” or “Delete Indicator Window”, or the chart context menu command of “Indicators List – Delete”.