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Key Takeaways

Difficulty:Intermediate
Reliability:Moderate
Category:momentum
Timeframes:15M, 1H, 4H

Commodity Channel Index (CCI)

momentumšŸ“Š 15M, 1H, 4H, Daily

Measures price deviation from statistical mean. Values typically range from -100 to +100.

Formula

Code
CCI = (Typical Price - SMA of TP) / (0.015 Ɨ Mean Deviation)
Typical Price = (High + Low + Close) / 3

Detailed Explanation

The Commodity Channel Index (CCI) was developed by Donald Lambert to identify cyclical trends in commodities.

**Key Levels:** - Above +100: Overbought - Below -100: Oversold - Zero line: Trend direction

**Trading Methods:** - Overbought/Oversold reversals - Zero-line crossovers - Divergences with price

Parameters

Period
Default: 20
CCI calculation period

šŸ“ˆ Bullish Signals

CCI crosses above -100 from below, bullish divergence

šŸ“‰ Bearish Signals

CCI crosses below +100 from above, bearish divergence

Python Implementation

CCI calculation

Python
import pandas_ta as ta
df['CCI'] = ta.cci(df['high'], df['low'], df['close'], length=20)

TradingView Pine Script

Try on TradingView
JavaScript
//@version=5
indicator("CCI")
cci = ta.cci(hlc3, 20)
plot(cci, "CCI", color=color.purple)
hline(100, "Overbought")
hline(-100, "Oversold")
šŸ“Š Use TradingView for Advanced Charting
Professional analysis tools with 100+ technical indicators
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MT5 MQL5 Code

C++
int cci_handle = iCCI(_Symbol, _Period, 20, PRICE_TYPICAL);
double cci[];
CopyBuffer(cci_handle, 0, 0, 3, cci);

Python Libraries

pandas-ta
Technical analysis
pip install pandas-ta

Common Mistakes

āœ—Trading every extreme without confirmation
āœ—Not accounting for values beyond Ā±200

Confirmation Signals

Price action
Volume
Other oscillators

Best For

Overbought/oversoldCyclical trendsDivergence trading

šŸ’” Pro Tips

  • ā€¢Originally designed for commodities but works on all markets
  • ā€¢Values can exceed Ā±200 in strong trends
  • ā€¢Zero-line crossovers indicate trend changes
Last updated: December 29, 2024

Educational Disclaimer

This content is for educational purposes only and does not constitute financial or investment advice. Trading involves significant risk and you may lose your capital. Always consult a licensed financial advisor before making investment decisions.

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Investopedia - Technical IndicatorsBabyPips - Technical IndicatorsMetaTrader 5 Docs

Frequently Asked Questions

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Stochastic Oscillator

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Williams %R

Momentum oscillator measuring overbought/oversold levels on a scale of 0 to -100.

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