The Commodity Channel Index (CCI) was developed by Donald Lambert for the commodity markets. Despite its name, it can be used effectively on any type of security, not just commodities.
The CCI is a means by which the variation of a security's price is calculated from its statistical mean. Much like the Average Directional Movement Index, the CCI can help give a valuable measurement of the overall trendiness of a market. The faster the CCI is accelerating, the more strongly the market is trending.
The index typically oscillates between +100 and -100. Readings above +100 implies an overbought condition while readings below -100 imply an oversold condition.
This indicator can provide important information to a trader even when it is not giving entry signals. If a market stays inside the +/-100 range most of the time, it shows the absence of a trend, so it might be best to avoid that market.
Calculation:
TypPrice = Typical Price indicatorünün değeri
SMA = Basit MovingAverage
Inputs:
Period = 14
Indicates time period(the number of days for daily analysis, the number of weeks for weekly analysis, etc.).
Indicator Type: Volatility, Momentum