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How to use Commodity Channel Index in currency automated trading
12-10-2019, 10:31 AM,
Post: #1
How to use Commodity Channel Index in currency automated trading
How to use Commodity Channel Index in currency automated trading

CCI is developed by Donald Lambert in the 1980s as an indicator to identify trends and measures the current price level relative to an average price level over a given period of time with a factor of 0.015 and normal deviations of the average price.

CCI = (Typical Price - X-period SMA of TP) / (.015 x Mean Deviation), Typical Price (TP) = (High + Low + Close)/3, Constant = .015

+100 and -100

These 2 levels give a strong indication of the trend of the currency. As the indicator surge above or below the -100 or +100, this show the strong price to start of a uptrend or downtrend. This is often use as a leading indicator to look for beginning of trend when the indicator crosses the hundred level. A buy or sell trades can be executed to catch the beginning of the trend.



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