In recent years, I haen't come across too many people interested in CCI, and only one reference to Woodies CCI.
Perhaps (only!) the following on CCI, in general, may be useful.
CCI (Commodity Channel Index) on the FCharts main chart overlays.
The primary focus of CCI is to measure the deviation of the price of the currency pair from its statistical average. As such, CCI is an extremely good and sensitive measure of momentum and helps us to optimize only the highest probability entries for our setup.
In version 1.5.95 A, Simon split the CCI SMA smoothing into 2. You can now set the Smoothing for CCI1 and CCI2 independently.
The Commodity Channel Index (CCI) is an indicator designed to identify cyclical turns in commodities. It may also be applied to stocks or bonds. There are 4 steps involved in the calculation of the CCI:
1. Calculate today's Typical Price (TP) = (H+L+C)/3 where H = high; L = low, and C = close.
2. Calculate today's 20-day Simple Moving Average of the Typical Price (SMATP).
3. Calculate today's Mean Deviation. First, calculate the absolute value of the difference between today's SMATP and the typical price for each of the past 20 days. Add all of these absolute values together and divide by 20 to find the Mean Deviation.
4. The final step is to apply the Typical Price (TP), the Simple Moving Average of the Typical Price (SMATP), the Mean Deviation and a Constant (.015) to the following formula: (missing)
Index measures the position of price in relation to its moving average. This can highlight that the market is overbought/oversold or to warn that a trend is weakening. The indicator is similar in concept to Bollinger Bands except it is shown as a line.
In a ranging market, go long if the CCI turns up from below -100 and go short if the CCI turns down from above 100. As a slight variation, you might like to try the either of the following formulas.
(CCI[2] < -150 OR CCI[1] < -150) AND CCI > -100
It checks that the CCI has been less than -150 during the two previous periods and that it has then risen to be greater than -100.
Or (CCI[3] < -100 OR CCI[2] < -100 OR CCI[1] < -100) AND CCI > 0
It checks that the CCI has been less than -100 during the three previous periods and that it has then risen strongly to be greater than zero.
In a trending market go long on a bullish divergence and go short on a bearish divergence.
Divergences are stronger signals that occur less frequently. They are mostly used to trade intermediate cycles.
See
http://biz.yahoo.com/investopedia/080304/3367.html?.v=1 for CCI and Channel breakouts.
SMA Crossovers for CCI in UDI Combined Chart.
Q. My question is about the SMA. Is it available for the CCI indicator as a line (I hope it is) and if it is I can not see it in the Settings, Variables to change the colour. I would like to use its crossover in a formula if possible.
A. The problem there is that there's no one value for the SMA. What happens is that each individual SMA value for the past 'n' days is deducted from the mean deviation of the typical price for the same day, then it's all added up and divided by the number of periods. There isn't a point where I can say 'this is the SMA value'.
However, you can create your own SMA crossover of either line by using
CCI[1] < SMA CCI1[1], 9 AND CCI > SMA CCI, 9
That would find an upwards cross where the CCI1 line crossed over your SMA of CCI1.
It doesn't plot a line, but you could put 'CCI1' and SMA CCI1, 9' into a couple of UDI formula slots and then chart them combined on the lower chart. (Read the above Q and A if arriving here from a link.)
From a user: This video is geared to mainly CCI traders but has some insights applicable to all
http://madscalper.com/videos/riskVre....html?aid=8160 (Includes information on Risk/Reward.)
