Commodity Channel Index (CCI) 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:
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 D
CCI = M/D
Technical Indicator Description
Full description of CCI is available in the Technical analysis: Commodity Channel Index
Translated from Russian by MetaQuotes Software Corp.
Original code: https://www.mql5.com/ru/code/7769
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