Commodity Channel Index
Commodity Channel Index measures how far price has deviated from its statistical average, scaled to oscillate around zero.
What It Measures
Deviation from the mean: whether typical price is unusually high (+100) or low (-100) versus its recent average.
The Math (Simplified)
Typical Price = (High+Low+Close)/3. CCI = (TP - SMA(TP,N)) / (0.015 × Mean Deviation). 0.015 scales most values to ±100.
Default Inputs & Tuning
20 days is classic. Levels +100/-100 mark overbought/oversold; +200/-200 mark extreme extensions.
When It Works (Market Edge)
Detecting new trends: CCI crossing above +100 confirms bullish momentum; crossing below -100 confirms bearish momentum.
When It Fails
Noisy ranges: CCI whipsaws around zero, giving many +100/-100 flips while price goes nowhere.
Common Myths
Myth: CCI above 100 means you should always sell.
Truth: In a new uptrend CCI can stay above 100 for weeks while price keeps rising. It confirms momentum, not an immediate top.
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