Momentum oscillator
CCI (Commodity Channel Index)
An unbounded oscillator that measures price deviation from its average.
What is CCI (Commodity Channel Index)?
The Commodity Channel Index (CCI), developed by Donald Lambert, measures how far price has deviated from its statistical average. Despite the name it works on any market, not just commodities, and is used to spot overbought/oversold extremes and emerging trends.
How it works
CCI compares the typical price to a moving average of it, scaled by mean deviation. It is unbounded but readings above +100 are considered strong/overbought and below −100 oversold. Crosses of the zero line signal trend shifts, and divergence against price warns of reversals.
How traders use it
- ▸Overbought/oversold: watch reactions from beyond ±100.
- ▸Zero-line crosses: confirm trend direction.
- ▸Breakout: a push beyond +100 can signal a strong new trend.
- ▸Divergence: price/CCI disagreement flags reversals.
Build CCI (Commodity Channel Index) without code in Algovex
CCI is a node in Algovex, wire a threshold or zero-cross trigger into your entries, add a trend filter, backtest, and export. No coding required.
Key parameters
| Parameter | What it does |
|---|---|
| length | Lookback period (commonly 20). |
| source | Typically the typical price (HLC/3). |
Frequently asked questions
What does a CCI above 100 mean?
A CCI above +100 indicates price is well above its average, strong momentum that some read as overbought and others as a trend-confirmation breakout. Below −100 is the mirror. Backtest which interpretation fits your market in Algovex.