CCI Divergence Indicator

Forex CCI Indicator is an indicator of the family of oscillators has been developed by Donald Lambert. In its origin, this indicator is designed to identify cyclical involvement products (raw materials). However, the use of ICT was extended to capital markets.

CCI Technical indicator measures the change in share price over average prices typical. This indicator assumes that assets are evolving cycle of ups and downs that occur at regular intervals. Lambert recommended to be used to calculate period CCI third full cycle. During the period of the ICC will be shorter, the indicator will be volatile.

CCI Indicator explained - Method of calculation

CCI principle calculation based on measuring the difference in price compared to the moving average.

On average up to x times the sum of the Most High, low and closing:
Average = Average (above + below + Closing Period MMA)

Calculating the sum of the deviations from the average over the period of calculation of the indicator.
* The sum of the differences = Sum of differences ValeurAbsolue + (high + low + close - Medium);
* Calculates repeat "Period-1" times.

The mean differences
Mean deviation = sum of deviations / Period

Calculate the value of the indicator:
CCI = (high + low + close-day average) / (0015 * Average deviations)

CCI Divergence Indicator Application for trading:

Commodity Channel Index can be used to identify levels of over-bought and over-selling. Beyond 100, the title is considered to be over-bought, pre -100 oversold. Level between -100 and 100 does not give a specific indication.

CCI Divergence Indicator can be used in several ways:

Transfer level (-100 or 100). When CCI is above the 100 level, the trend is strongly upwards. Conversely, when the CCI is below -100, the trend is strongly downward.

The buy signal is triggered when the left indicator of the level of sales. Position can be closed when the CCI reaches the area of ​​purchase (the trader can expect output to decline this area). Similarly, we can sell short when CCI level beyond purchase and redeem shares when the indicator reaches the level -100.

The merchant can also find the differences between the current and the CCI Divergence Indicator. A divergence occurs when the indicator courses and do not move in the same direction. A connector is dedicated to the differences, you can find it by clicking here.

Trends can be observed in the CCI. Breaking movement indicator provides information usable.