Home shopping channel, Commodity Channel Index (CCI)
Designed by Donald Lambert, a commercial channel index (CCI) was designed to identify cyclical turns in the market-based instruments. The assumption behind the indicator is that any market-based instruments move cyclically with the maximum and minimum, the following certain intervals. Lambert recommended using 1 / 3 full cycle (from minimum to minimum or maximum up to maximum) as a temporary setting for the CCI. (Note: The definition of the length of the cycle regardless of the CCI). If the cycle lasts 60 days (at least every 60 days), it would suggest a 20-day CCI. For example, using a 20-day CCI. Evaluating CCI occurs in 4 stages:
1. Calculated typical price (TP), the last period = (H + L + C) / 3, where H = max, L = minimum, and C = closure.
2. Calculated 20-periodnaya Simple Moving Average of typical prices (SMATP)
3. Calculated average deviation. First, compute the absolute value of the difference between SMATP last period and the typical price of each of the past 20 years. Put all of these absolute values together and divide by 20 to find the average deviation.
4. The final stage is a typical price (Typical Price), Simple Moving Average of typical prices (SMATP), Mean Deviation (Mean Deviation) and Constant (.015) with the following formula:
To be able to set the measurement Lambert constant of .015 to ensure that approximately 70% - 80% of CCI values would fall within the range from -100 to +100. CCI fluctuates above and below zero. The percentage of CCI values falling between 100 and -100 will depend on the number of periods used. Shorter CCI will be more volatile and less percentage of values in the range of +100 to -100. Rather than increasing the number of periods used to calculate the CCI, the higher the percentage value is between +100 and -100.
The basic principles of trade using CCI Lambert considered the motion above +100 and below -100 to submit buy and sell signals. Since approximately 70% - 80% of CCI values are between +100 and -100, buy or sell signal will be given only in 20 - 30 per cent of the time. When the CCI moves above +100, it is believed that market-based instruments are in a strong upward trend and a buy signal. The position must be closed when the CCI moves back below +100. When the CCI moves below -100, it is believed that market-based instruments are in a strong down trend and a sell signal. The position must be closed when the CCI moves back above -100.
In addition to the initial basic principles Lambert, traders also found that the CCI can be valuable for determining the turn. CCI is a versatile indicator capable of a broad set of signals of buying and selling.
- CCI can be used to determine the levels of perekuplennosti and pereprodannosti. Market-based instruments is considered to be resold in the CCI falls below -100 perekuplennym and when it exceeds 100. From level pereprodannasti signal purchases may be made when the CCI moves back above -100. Perekuplennosti signal from the level of sales may be made when the CCI moves back below +100.
- Like most oscillators, for CCI divergence can also be used to improve the reliability of signals. A positive divergence below -100 increases the reliability of the signal based on the movement back above -100. The negative divergence above +100 would increase the reliability of the signal based on the movement back below +100.
- Break trend lines can also be used for the alarms. Trend line can be carried out, connecting the maximum and minimum CCI. Increase above the level of -100 pereprodannosti and break trend line is seen as a bullish signal. The decline from the level below 100 perekuplennosti and the trend line break could be a signal disservice.
Traders and investors use the CCI to determine the price turn, price extremes and trend strength. As with most indicators, CCI should be used in combination with other aspects of technical analysis. CCI is a dynamic oscillator. In addition to the momentum for the technical analysis may also be indicators of volume and pricing schedule.
20-day CCI for Brooktrout (BRKT) is an example of the basic principles of Lambert. Even though there were several good signals, the use of crossing above and below the +100 / -100 over multiple rapid turn. In January of action has violated the resistance level at 20 and has doubled over the next few weeks. CCI moved above and below 100 a few times, but the action remained in a strong upward trend. CCI has remained above 50 for about 7 weeks (blue oval), but quickly Facing below 100 may have led to early exits. Quick Facing do not make a bad indicator. However, traders and investors must learn to use the CCI in conjunction with other indicators and analysis of schedule. In addition to CCI must be verified by various time periods as well as the point of purchase and sale. For Brooktrout point of purchase while crossing above and below 50, probably would work better. What works for a marketing tool, not necessarily work for another.
Using the graphical programs, CCI can be installed as an indicator of above or below the schedule price. The first option is the right sets the number of periods to calculate the indicator. By default, typically used 20 periods, and the indicator can be used for daily, weekly or monthly schedules. Horizontal lines are usually set at -100, 0 and 100 for determining the intersections of the median line and extremes. When the indicator moves above +100 or below-100, parts of which are above or below zashtrihovyvayutsya. On any graph can be opened multiple windows CCI, and users can compare different options.
Designed by Donald Lambert, a commercial channel index (CCI) was designed to identify cyclical turns in the market-based instruments. The assumption behind the indicator is that any market-based instruments move cyclically with the maximum and minimum, the following certain intervals. Lambert recommended using 1 / 3 full cycle (from minimum to minimum or maximum up to maximum) as a temporary setting for the CCI. (Note: The definition of the length of the cycle regardless of the CCI). If the cycle lasts 60 days (at least every 60 days), it would suggest a 20-day CCI. For example, using a 20-day CCI. Evaluating CCI occurs in 4 stages:
1. Calculated typical price (TP), the last period = (H + L + C) / 3, where H = max, L = minimum, and C = closure.
2. Calculated 20-periodnaya Simple Moving Average of typical prices (SMATP)
3. Calculated average deviation. First, compute the absolute value of the difference between SMATP last period and the typical price of each of the past 20 years. Put all of these absolute values together and divide by 20 to find the average deviation.
4. The final stage is a typical price (Typical Price), Simple Moving Average of typical prices (SMATP), Mean Deviation (Mean Deviation) and Constant (.015) with the following formula:
To be able to set the measurement Lambert constant of .015 to ensure that approximately 70% - 80% of CCI values would fall within the range from -100 to +100. CCI fluctuates above and below zero. The percentage of CCI values falling between 100 and -100 will depend on the number of periods used. Shorter CCI will be more volatile and less percentage of values in the range of +100 to -100. Rather than increasing the number of periods used to calculate the CCI, the higher the percentage value is between +100 and -100.
The basic principles of trade using CCI Lambert considered the motion above +100 and below -100 to submit buy and sell signals. Since approximately 70% - 80% of CCI values are between +100 and -100, buy or sell signal will be given only in 20 - 30 per cent of the time. When the CCI moves above +100, it is believed that market-based instruments are in a strong upward trend and a buy signal. The position must be closed when the CCI moves back below +100. When the CCI moves below -100, it is believed that market-based instruments are in a strong down trend and a sell signal. The position must be closed when the CCI moves back above -100.
In addition to the initial basic principles Lambert, traders also found that the CCI can be valuable for determining the turn. CCI is a versatile indicator capable of a broad set of signals of buying and selling.
- CCI can be used to determine the levels of perekuplennosti and pereprodannosti. Market-based instruments is considered to be resold in the CCI falls below -100 perekuplennym and when it exceeds 100. From level pereprodannasti signal purchases may be made when the CCI moves back above -100. Perekuplennosti signal from the level of sales may be made when the CCI moves back below +100.
- Like most oscillators, for CCI divergence can also be used to improve the reliability of signals. A positive divergence below -100 increases the reliability of the signal based on the movement back above -100. The negative divergence above +100 would increase the reliability of the signal based on the movement back below +100.
- Break trend lines can also be used for the alarms. Trend line can be carried out, connecting the maximum and minimum CCI. Increase above the level of -100 pereprodannosti and break trend line is seen as a bullish signal. The decline from the level below 100 perekuplennosti and the trend line break could be a signal disservice.
Traders and investors use the CCI to determine the price turn, price extremes and trend strength. As with most indicators, CCI should be used in combination with other aspects of technical analysis. CCI is a dynamic oscillator. In addition to the momentum for the technical analysis may also be indicators of volume and pricing schedule.
20-day CCI for Brooktrout (BRKT) is an example of the basic principles of Lambert. Even though there were several good signals, the use of crossing above and below the +100 / -100 over multiple rapid turn. In January of action has violated the resistance level at 20 and has doubled over the next few weeks. CCI moved above and below 100 a few times, but the action remained in a strong upward trend. CCI has remained above 50 for about 7 weeks (blue oval), but quickly Facing below 100 may have led to early exits. Quick Facing do not make a bad indicator. However, traders and investors must learn to use the CCI in conjunction with other indicators and analysis of schedule. In addition to CCI must be verified by various time periods as well as the point of purchase and sale. For Brooktrout point of purchase while crossing above and below 50, probably would work better. What works for a marketing tool, not necessarily work for another.
Using the graphical programs, CCI can be installed as an indicator of above or below the schedule price. The first option is the right sets the number of periods to calculate the indicator. By default, typically used 20 periods, and the indicator can be used for daily, weekly or monthly schedules. Horizontal lines are usually set at -100, 0 and 100 for determining the intersections of the median line and extremes. When the indicator moves above +100 or below-100, parts of which are above or below zashtrihovyvayutsya. On any graph can be opened multiple windows CCI, and users can compare different options.based on www.stockcharts.com
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