OscillatorsIntermediate[ MP.IND.CCI ]
CCI
Commodity Channel Index
CCI (Commodity Channel Index), developed by Donald Lambert in 1980, measures the deviation of price from its statistical average in terms of average deviations.
Category
Oscillators
Difficulty
Intermediate
Markets
Commodities, Forex, Stocks
Timeframe
1H, 4H
Combinations
2 tools
Signals
6 setups
LIVE CHARTCCI ACTIVE
[ HOW TO READ THE CHART ]
Green Zone: CCI > +100 → Overbought: possible reversal or slowdown
Red Zone: CCI < -100 → Oversold: possible bullish reversal
Main Line: CCI cross above 0 → Bullish momentum: long bias
Confluence: Combine CCI with RSI for maximum probability
[ WHAT TO WATCH ON THE CHART ]
Observe how CCI behaves relative to key price points. Note moments when the indicator reaches extreme levels and how price reacts. Look for divergence patterns between the indicator and price movement.[ FORMULA ]
CCI = (Typical Price - SMA(TP,N)) / (0.015 × Mean Deviation) TP = (H + L + C) / 3 Mean Deviation = average of |TP - SMA(TP)|
What signals does CCI generate?
CCI > +100 → Overbought: possible reversal or slowdown
CCI < -100 → Oversold: possible bullish reversal
CCI cross above 0 → Bullish momentum: long bias
CCI cross below 0 → Bearish momentum: short bias
Bearish CCI/price divergence → Strong reversal signal
CCI > +200 → Anomalous move: possible climax
What is CCI and how does it work?
CCI (Commodity Channel Index), developed by Donald Lambert in 1980, measures the deviation of price from its statistical average in terms of average deviations. Originally designed for commodity trading (hence the name), it's successfully applicable to any asset. Unlike RSI and Stochastic (which oscillate in fixed ranges), CCI has no theoretical limits — it can reach ±400 in markets with extreme moves. However, statistically, it remains between ±100 about 70-75% of the time (with the 0.015 multiplier in the formula, this is Lambert's choice).
How do you use CCI in trading?
CCI is used in three ways:
1) OVERBOUGHT/OVERSOLD: CCI > +100 = price significantly above its average: possible overbought. CCI < -100 = price significantly below the average: possible oversold. Warning: in strong trends, CCI can stay > +100 for extended periods.
2) ZERO LINE CROSS: When CCI crosses zero upward → bullish momentum. When it crosses downward → bearish momentum. This cross is less noisy than ±100 crosses and works well as a trend filter on Daily.
3) DIVERGENCES (the most powerful use): CCI/price divergences are particularly effective because CCI reacts faster than RSI or MACD to momentum changes. A CCI divergence on 4H often anticipates a significant correction. Combine with support/resistance context for maximum effectiveness.
What are the strengths of CCI?
Sensitive to price extremes
Excellent for commodities and futures
Effective and early divergences
Doesn't have the fixed normalization problem
What are the limitations of CCI?
Without fixed limits: difficult to compare values across assets
Can confuse beginners on the scale
Many false signals on ±100 crosses without context
[ RELATED INDICATORS ]
[ RELATED CONTENT ]
Glossary:Asset
Liked this? Get one like it every week
Weekly market setups, new guides and AI insights. Free, zero spam.